3rd Party Insurance Recovery

The client.

An integrated oil company.

The business issue.

The company purchased stock of a downstream US subsidiary of an international energy conglomerate. In acquiring this organization, the purchaser not only took on long-term environmental liabilities; it also gained the rights to historical insurance policies. The selling entity had not recognized the value of these insurance assets and the fact that potential recoveries would enhance the value of the acquisition.

The client turned to members of The Claro Group to review the acquired liabilities and policies, determine value of insurance assets, and, where appropriate, pursue recovery in the most cost-effective manner.

The solution.

Claro Group professionals, together along with legal counsel and technical consultants, as appropriate, initiated a three-phase process to:

• Analyze the conceptual value of insurance assets.
• Develop a comprehensive claim package and presentation for discussion with multiple historical insurance carriers.
• Present and negotiate insurance recovery settlements (typically buyouts).

The results.

This approach enabled the client to:

• Realize greater settlement dollars. The claim package and negotiation explicitly quantified all “downside” risks incorporated in the buyouts.
• Achieve faster settlement – the three phases were completed in less than two years, more than twice as fast as typical litigation.
• Lower its transaction costs by minimizing legal fees and management distraction.