Into the Breach

Palisade Insurance Partners is open for business, becoming the first transactional risk insurer with a primary focus on contingent risk. In this episode, Bryan and Gena are joined by John McNally, President at Palisade Insurance Partners, for a discussion of his new venture and how transactional risk insurance can be creatively utilized on contingent risk matters.

Topics reviewed include:

• How John’s background as a long-time transaction insurance underwriter and broker led him to his current opportunity

• The types of insurance solutions that Palisade will underwrite including claim and litigation portfolios, adverse cost insurance and judgment preservation insurance

• The underwriting process and price considerations for each type of risk

• How Palisade’s insurance products can complement RWI in M&A deals and bankruptcy

• Why transactional risk insurance is poised for strong growth on contingent risk matters

In a more philosophical episode, Bryan and Gena are joined by world renowned tax expert Harry Ballan, Managing Director, Global M&A Group, Alliant Insurance Services, for a wide-ranging discussion of how transactional risk insurance fits into the broader history of risk allocation between parties.

Topics discussed include:

• How Harry’s background as a PhD recipient, university professor, and then his “second-career” as a long-time tax partner at Davis Polk collectively helped prepare him for his broker role at Alliant

• How transactional risk insurance compares to other means to allocate risk throughout history

• Why the transactional risk insurance marketplace illustrates the binary and non-binary nature of risk

• The role that litigation insurance can play in risk management and decision-making

• Discussion of one of Harry’s favorite tax pupils who has a special connection to the podcast

Continuing our international theme, Bryan and Gena kick off ITB’s 2023 season with Joshua Begner, Head of Private Equity and M&A Israel at WTW, for a primer on how transactional risk insurance can be utilized on deals in Israel. Topics discussed include:

• How Josh developed the first RWI brokerage shop based in Israel with WTW

• Why RWI is well positioned for Israel’s “start-up nation” mentality

• An explanation of the RWI policy structure in Israel and why the unique structure is the “best of both worlds” benefitting both insurers and insured

• How RWI policies are currently priced in Israel

• The foreign location where Josh thinks ITB should go “on the road” in a future international episode

While the dramatic growth in RWI in recent years was driven primarily by private equity, corporate buyers have implemented transactional risk insurance with increasing frequency in the last eighteen months. Yet, due diligence for corporate buyers can be different from PE purchasers and many corporate dealmakers are still in the dark about the RWI underwriting process. In this episode, Bryan and Gena are joined by Nick Tuliebitz, Co-Head of M&A Insurance North America at AssuredPartners, for the end all be all discussion about what corporate acquirers must know about RWI and how corporate buyers can have a successful RWI underwriting experience.

Topics reviewed include:

• Why a corporate buyers should “know before you go” and be strategic about RWI early on in the deal process

• What type of due diligence RWI carriers expect

• How corporate buyers can minimize policy exclusions

• The importance of planning for specific due diligence workstreams -- notably tax and underlying insurance

• Preparing for the RWI underwriting call -- “a call to arms”

• Critical “dos and donts” for corporate buyers on the underwriting call

• “Follow-ups and Wrap-ups” -- what the corporate buyer can expect post-underwriting call

• Nick’s favorite Thanksgiving tradition

With an emphasis on technology and efficiency, io.insure recently launched Mio, a new global RWI underwriting platform for SME deals. In this episode, Bryan and Gena are joined by David Rogers, the co-founder of io.insure, for a discussion about this innovative approach to underwriting RWI.

Topics reviewed include:

• How Mio uses technology to offer a streamlined RWI underwriting process for up to $100 million dollar deals

• How Mio can still provide a more “traditional” underwriting process for insureds that prefer this approach

• Using the platform for real estate deals through its Rio product

• The reaction from insureds and brokers since the launch

• What David would do if he won Powerball

Building on its incredible growth since its formation in early 2020, Dual Transaction Solutions is now launching a stand-alone tax insurance product. In this episode, Bryan and Gena are joined by Yash Jafari, Senior Vice-President Tax at Dual Transaction Solutions, for a discussion on Dual’s latest transactional risk offering.

Topics reviewed include:

• The “three buckets” of tax risks that Dual finds attractive to underwrite in today’s market

• How the IRS’s renewed focus on enforcement will impact the tax insurance product

• The use of tax insurance for carbon credits under the Inflation Reduction Act

• The tax underwriting approach that Dual will use -- combining a strong technical expertise with practicality, innovation, and creativity

• Yash’s personal favorite section of the Code

Continuing with our “career theme,” Bryan and Gena are joined by Heith Rodman, Vice-President and Transactional Risk Underwriter at Berkley Transactional, for a discussion on making the career jump from M&A counsel at an international law firm to transactional risk underwriter at Berkley.

Topics discussed included:

• Heith’s background as a long-time M&A attorney at Jones Day in Atlanta

• Why Heith made the transition from M&A attorney to transactional risk underwriter

• The biggest differences between working as M&A counsel and underwriting RWI

• The information deficiency that transactional risk underwriters face

• The aspects of the RWI process that matter most to M&A attorneys

• Heith’s career advice for other M&A attorneys that are interested in joining the RWI industry

• How many times Heith has visited the Coca-Cola museum

Founded by brothers Dave and Ken DeBerry, Concord Specialty Risk was the true pioneer in the RWI space and one of the original carriers offering the product. With Ken’s recent retirement, Bryan and Gena are joined by his successor, Rustin Paul. Topics discussed included:

• How Rustin intends to build on Concord’s proud heritage to grow in a competitive RWI marketplace

• The one critical question that Concord underwriters ask when deciding how to value a risk

• Concord’s pragmatic approach to underwriting, including areas of heightened concern in deals -- and areas of lesser concern as well

• Why Concord is moving towards a 90 minute underwriting call

• We put Rustin on the spot in a discussion around boxing

RWI coverage for healthcare deals has evolved -- years ago, healthcare transactions were generally difficult to insure; now, multiple RWI markets offer attractive coverage options and competitive rates. Still, healthcare deals have unique features that carry additional risk for insurers and can result in a more robust due diligence process before the policy is bound. In this episode, Bryan and Gena are joined by Jonathan Sprintz, Managing Director at Blue Chip Underwriting, to talk about utilizing RWI in healthcare transactions.

Topics discussed include:

• The historic use of RWI on healthcare deals

• How the RWI marketplace has evolved to provide better coverage options 

• Certain types of healthcare transactions and specific facets of deals where

RWI coverage is still challenging

• The scope of due diligence that carriers expect Buyers to provide to obtain RWI coverage, including with respect to specialized topics such as billing and coding

•Current pricing and retentions on healthcare deals

2021 was a historical year for RWI. Carriers and brokers placed more RWI policies than ever before. Premiums rose, reflecting the available supply and demand for the product. Multiple new carriers jumped into the North American market. But after an incredible 2021, what lies ahead in 2022 is an open question. Can RWI continue its winning streak, or do more ominous days lie ahead? To answer this question and many more, Bryan and Gena are joined by Aartie Manansingh, Managing Director at Willis Towers Watson. Topics discussed included:

• Recap of the 2021 year and analysis of the opening moments of 2022

• Whether premiums are likely to remain elevated in 2022

• The prospect of more insurance carriers entering the North American market

• How existing insurance carriers are challenged by human capital deficiencies

• The most likely “hot areas” for RWI in 2022