ANV Launches Transaction Risk Insurance (TRI)

By | May 28, 2013

ANV Holdings BV, a Dutch-headquartered specialty insurance business, announced the launch of a new line of business, Transaction Risk Insurance (TRI) coverage. ANV will initially focus on providing locally compliant products in local languages for different regions, in particular for the European Market.

“We won’t be directly involved in the U.S. market just yet,” said Thomas M. Mannsdorfer, the Underwriting Director for Transaction Risk at ANV. He explained that the complexity of that market would require additional personnel and investment, adding, however, that long term plans are already being made to expand into the U.S., probably within the next two years.

ANV’s TRI coverage would nonetheless be available in situations where a transaction involves U.S. subsidiaries or counterparties, in those instances where the main participants are outside of the U.S., Mannsdorfer said.

TRI products are offered by its Barcelona-based underwriting platform ANV Global Services Ltd., Spanish Branch. ANV Syndicate 1861 (ANV’s syndicate at Lloyd’s of London) will function as underlying risk-bearing entity, fully backed by a panel of major reinsurance companies.

ANV’s bulletin points out that it has built a special expertise on the following products:
— Warranties & Indemnities Insurance (W&I)
— Public Offering of Securities Insurance (POSI)
In addition, subject to special acceptance, additional products may be available, including:
— Tax Liability Insurance (TLI)
— Contingent Risk Transfer Insurance (CRTI)

“We are pleased to launch innovative and tailor-made TRI products to meet the growing demand for these insurance solutions that can serve as alternative securitization and can help to break deadlocks during contract negotiations,” Mannsdorfer said. “As with all lines we support at ANV, we provide clear policy forms and market standard coverage as well as accounting for local market languages and legal requirements.”

Policy limits for standard coverage are $15 million, or €15 million, and £10 million, Mannsdorfer said; adding that higher limits would be possible in transactions involving programs, or the formation of co-insurance arrangements.

Premium costs are more or less in line with those charged by the London market at between 1.0 and 1.75 percent of the total value.

ANV’s founder and CEO R. Matthew Fairfield commented: “Transaction Risk remains a strongly growing and especially dynamic area of the specialty market. Our goal from these new lines is to help businesses limit their risks on key transactions and allow these firms to create opportunities more easily, more quickly and with far greater certainty.”

ANV may have chosen a propitious time to enter the M&A coverage market, as it is showing signs of a recovery, following the economic crisis that began in 2008. The bulletin notes that, “as referenced widely across industry sources, the more than US$ 2 trillion global mergers and acquisitions market remains more than 40 percent below the record volumes recorded before the 2008 financial crisis.

“Execution and due diligence timelines have dramatically expanded as companies deal with greater concerns for risk and greater complexity within inter-regional jurisdictions and business practices.”

Source: ANV Holdings

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