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Mergers & Acquisitions: Representations & Warranties

What is Representations and Warranties?

  • Helps protect buyers or sellers in merger and acquisition transactions from financial loss in the event of a breach of representations and warranties made by the sellers.
  • Deal size: $25M to approximately $4B+.
  • Available limits up to $100M for any single transaction.
  • Minimum premium of $150K.
  • Retention typically 1.0% of the enterprise value, dropping to 0.5% after 12 months.
  • Coverage available for risks on a 100%, shared, layered or excess basis from AIG’s non-admitted carriers only.

The AIG Advantage

Underwriting Expertise

  • Tailored programs underwritten by accomplished M&A professionals, many of whom were investment bankers, lawyers and tax experts before joining AIG and understand how to best structure solutions quickly and strategically.

Multinational Solutions

  • Expertise, solutions and service delivered in a globally consistent and seamless fashion through one of the largest global networks in the industry, spanning 215+ countries and jurisdictions

Claims Capabilties

  • In-house claims professionals specialize in handling complex transaction disputes and one of the largest and most varied claims portfolios in the industry.

Why AIG

Problem Solvers

Challenge: A client with a diverse range of investments in different sectors sought a single insurance carrier for all of its acquisitions.

Solution: AIG’s broad appetite enabled us to deliver solutions for the client on multiple deals, including deals with very different profiles.

Benefit: AIG has a broad appetite for various deal sizes and sectors and underwrites deals from across the board regularly. AIG has also built strong relationships with many clients who continue to come back to AIG for their transactions.

Creative Solutions

Challenge: A client was acquiring a company that had various multinational exposures, with operations in North America, Europe and Asia Pacific.

Solution: AIG leveraged its local teams’ expertise to underwrite the risk in the various jurisdictions.

Benefit: AIG regularly delivers on multinational deals. We have a global team with underwriters in hubs across the world and expertise in deals in many geographies.

Claims Expertise

Challenge: A corporate buyer purchased an R&W policy for the acquisition of a manufacturing company. After the deal closed, federal inspectors shut down the factory of the acquired company for three days on account of regulatory violations.

Solution: The buyer submitted a claim under the policy for its direct losses. AIG confirmed that a breach of the compliance with laws representation had occurred and agreed that the amount of direct losses suffered by the buyer on a multiplied basis was the correct measure of damage.

Benefit: AIG’s dedicated and experienced claims team specializes in disputes surrounding complex transactions and in processing customer claims in an expedient manner with proven claims paying ability.

National Leadership

Mary Duffy

Global Head of M&A

 

Allison Barrett Cooper

Head of North America Financial Lines

Anna Rozin

North America Head of M&A