UK risk management association Airmic and global professional services firm Aon have jointly published a new guide for risk and insurance professionals highlighting the key elements to be considered when organisations negotiate and engage in mergers and acquisitions (M&A).
Titled “Risk and Insurance in Mergers and Acquisitions”, the guide provides guidance on the types of deals organisations undertake. It outlines the key risk, insurance and human capital factors risk professionals should consider, together with the insurance solutions that are available to support a transaction.
“Risk and Insurance in Mergers and Acquisitions” sets out the stages involved in M&A and provides guidance on risk management and the role insurance can play. It also takes the reader through the various stages of insurance and risk due diligence.
Julia Graham, deputy CEO and technical director of Airmic, explained: “M&A can boost growth and release opportunity, but the importance of assessing risk and undertaking comprehensive due diligence for M&A transactions can never be overstated.
“It is essential that these considerations occur at the earliest stage within a transaction and engage relevant stakeholders across an organisation—it is an enterprise risk management activity.
“This excellent guide highlights the types of deals organisations undertake and will help our members to consider the principal risks, insurance and human capital considerations needed to complete M&A transactions successfully.”
Alistair Lester, CEO of Aon’s M&A and transaction solutions in EMEA, added: “The role of risk advisory and contingent capital solutions in securing investments and enhancing returns is already embedded in a significant proportion of M&A transactions.
“In the last few quarters, we have seen an expansion in both the scope of solutions deployed, and the range of organisations adopting these solutions. Solutions are evolving from ‘traditional’ diligence and warranty and indemnity insurance solutions into tax, structured credit and intellectual property.
“The range of users is growing from largely private equity buyers to increasing participation of national and multinational companies.
“Combined, these two trends allow the risk management community to add significant value to our organisations in an M&A context.”
Airmic, Risk Management, Insurance, Reinsurance, Mergers & Acquisitions, Alistair Lester, EMEA North America