Insurance Due Diligence
Due Diligence has been established as an important factor in transactions and is applicable to companies throughout the world, no matter where they are domiciled or have a presence. Previously insurance was just another part of this exercise often carried out by those with little working knowledge of the subject and undertaken utilising a checklist format.
With the increasing globalisation of risk and interdependency of group companies, supply chains and the growing complexity of business it is becoming increasingly important for the Due Diligence of Insurance to be undertaken separately.
A comprehensive Insurance Due Diligence exercise is of particular importance when considering a takeover, merger or listing. Conducting a preliminary risk identification exercise will provide valuable information on insurable and non-insurable risks and other cost issues that may not otherwise be taken into account. In addition by auditing the current and past insurance programmes consideration can be given to the future and past liabilities to which the new entity will be exposed and action can be taken to mitigate these.
Insurance Due Diligence should not only be considered when ownership or company structures change. With the ever-changing marketplace, legislation, regulation and supply chain management, historic insurance programmes can quickly become out dated and ineffectual. Occasional insurance programme audits as part of your overall risk identification and management strategy can help ensure that your organisation remains protected and that your insurance arrangements remain suitable.
At Lambert Brothers Insurance Brokers (Hong Kong) Ltd we have considerable experience in carrying out Insurance Due Diligence exercises in Hong Kong and China. As part of the Wells Fargo Network we can also undertake reviews of global programmes utilising a network of strong local insurance brokers. Unlike the mega brokers who will often utilise ‘reverse flow units’ in specific countries, our partners have considerable experience in placing and servicing clients in their countries and understand in depth the local issues. Combined we are equivalent to the 4th largest broker in the world on premium volume.
You will benefit from a specific recognised market expertise from a broker with over 65 years experience in the Asian market. Our team has extensive experience of local and global arrangements and it is our long-term outlook and attention to detail that sets us apart in our service to you, our client.
Scope of Service
We understand that each review is different, an action plan and our scope of service would be agreed with you in advance. A typical due diligence exercise would include:
- Audit and Review of current insurance programmes with commentary
- Historic Claims review where available
- Risk Identification exercise
- Comment on transfer of responsibility of insurable liabilities in any purchase agreement
- Employee Benefits review and benchmarking
- Uninsured Risks Commentary
- Provision of a report detailing our findings