AZ Actuarial services for mergers and acquisitions provide due diligence for the buyer prior to committing to the transaction so the buyer knows what is being bought and what obligations it is assuming. Obligations include the target company’s contingent liabilities, problematic contracts, litigation risks and intellectual property issues, and much more. This is essential in private company acquisitions, where the buyer has little or no ability to obtain the required information for the company being acquired. AZA assists in mergers and acquisitions of life and health insurance blocks of business and companies representing both the buyers and sellers. We perform mergers and acquisitions AZ Actuarial services for insurance companies, reinsurance companies and investors.
AZA is experienced with:
- Adjusting the book value of the company,
- Estimating a value for the existing business and new business by determining appropriate actuarial assumptions through projections of the business and
- Estimating a value for the intangibles.
In executingthese services, we consider and perform the following:
- Development of appropriate actuarial assumptions for mortality, morbidity, interest, persistency and expenses from the company’s financial statements for the last three years using annual, quarterly and monthly financial statements, audit reports, inventories of policies in force and claim payments.
- Determine if the margins for the business are increasing or decreasing.
- For an acquisition, we determine whether the company’s projections for the existing and future business are believable and if the assumptions are appropriate and measure the projections for the current year with actual financial results.
- We consider the capital expenditures and other investments that will be made to continue growing the business and determine the margins and yield rate based on the projections.
- We consider whether the company hasadequate capital to continue operations between the time of diligence and the anticipated closing date of the acquisition.