Contingent Risk Insurance

Why Contingent Risk Insurance?

Insurance as a rule of thumb covers the unknown. However, the market to cover 'known' risks, both in and outside M&A, is continuing to grow, with increasing risk appetite, competition, knowledge and capacity coming from insurers.

Miller continue to lead the development of contingent risk solutions to replace traditional risk allocation methods.

Because every known risk is different, we always design a bespoke policy.

'Known' issues we’ve covered

Potential litigation, on-going litigation, arbitration, matters under appeal or challenges to awards
Insolvency risks allowing appointed officeholders/security trustees to release funds to creditors
Pension liabilities
Shareholder disputes
Environmental risks
Regulatory exposures
TUPE/Employee transfers
Contractual liabilities

We’ve worked with a range of brokers in the space – and the Miller team is a clear standout.
Deutsche Bank
Their deep market knowledge enables them to achieve fantastic results in tight timeframes.
LDC Group
“Having used the Miller team to broker a number of very difficult insurance solutions on key transactions, we have been impressed by their responsiveness, service and process which has freed my team up to focus on our primary legal service role for our clients.”
Herbert Smith

What Are The Benefits?

1. Releases capital

Insurance ring fences contingent liabilities by transferring the risk to the insurer. Businesses can then release funds from their balance sheet they’d otherwise be holding against the risk.

2. Facilitates transactions

Insurance releases funds that are usually held back during a transaction to cover a risk, reducing the likelihood of difficult negotiations.

3. Monetises contingent assets

Contingent risk solutions can help turn uncertain contingent assets – such as legal claims and tax receivables – into valuable collateral, which can be used to bring in new lenders and capital investors.

Key requirements for risks to be insurable

Data and/or analysis (e.g. a legal opinion) from a subject matter expert in the region where the risk originates
The risk must be quantifiable
The probability of loss needs to be relatively low

We can tell early on whether a known risk is insurable or not, managing expectations from the outset. If it is, we’ll work with you and your advisors to present the risk analysis in the best possible light.

How a policy works

Policy period

Matches the underlying risk period – typically 7-10 years, but we have structured some 11 and 12-year terms in the past.

How pricing works

How a premium is calculated

Premiums are highly bespoke and entirely dependent on the individual risk profile.
Rates can range from as low as 0.4 to as high as 20%+ (calculated as a percentage of the policy limit).

How you can pay

Upfront.
Staged.
Deferred and contingent (e.g. on outcome of a litigation).
It’s also common to mix and match the above methods.

Why Miller?

Your transactions are complex, time-sensitive and highly demanding. That’s why we choose a partner-led approach where our senior people give you constant support.

And, as a team, we hustle harder than any other M&A broker in the industry.

Find Out More

Meet The Team

Sindu Sivakumar

Head of Contingent Risk +44 (0) 20 7031 2481 [email protected] Read more

Andrew Johnson

Executive Director - Joint Head of Mergers & Acquisitions and Strategic Solutions (MASS) +44 (0) 20 4614 0030 [email protected] Read more

Edwina Charlton

Executive Director - Joint Head of Mergers & Acquisitions and Strategic Solutions (MASS) +44 (0) 20 4614 0027 [email protected] Read more

Rupert Newman

Director – Head of Broking, Mergers & Acquisitions and Strategic Solutions (MASS) +44 (0) 20 7031 2147 [email protected] Read more

Priyan Shah

Director - Mergers & Acquisitions and Strategic Solutions +44 (0) 20 4614 0133 [email protected] Read more

Jake Tobin

Chief Commercial Officer +44 (0) 20 4614 0032 [email protected] Read more

Ceri Davies

Director - Client & Market Coverage +44 (0) 20 4614 0075 [email protected] Read more

Rikesh Somaya

Associate Director – Professional and Financial Risks +44 (0) 20 7031 2919 [email protected] Read more

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