Mergers & Acquisitions — Life & Financial


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When it comes to sorting through the complexities of insurance industry mergers and acquisitions, Milliman offers unparalleled experience. We have been involved in more than three-quarters of the major M&A transactions in the industry over the past decade, representing value in excess of $100 billion.

Deal valuation

With offices throughout the United States and around the globe, Milliman can assemble a cross-disciplinary team to evaluate virtually any merger or acquisition scenario. Our sophisticated financial models are relied upon to deliver accurate projections and valuations of company assets.

Milliman routinely develops actuarial appraisals of target companies both large and small. The breadth of our experience in completed transactions gives us a unique knowledge base of current market pricing and market views of potential transactions. Along with appraisal valuation, our models are frequently used for Purchase GAAP projections, tax valuation, and to analyze risk management alternatives for an acquisition.

Because we never serve as a broker, we are a trusted source of independent analysis on a proposed deal’s valuation, merits and weaknesses.

Insight on trends, integration challenges

As the M&A environment changes, Milliman experts are at the forefront in understanding the implications of new regulations and evolving market conditions. An example: Private-equity firms are increasingly interested in acquiring companies in the industry. We have advised clients on private-equity offers and understand the full ramifications of this type of ownership change.

We're also called upon to help companies manage the complex post-deal integration process. Milliman evaluates companies' competing product offerings and provides critical advice on how to best meld the two organizations’ financial systems, ALM strategies, and investment portfolios.

Developing a price change mechanism for a VA transaction

The value of variable annuity (VA) business is highly dependent on market conditions. In a recent M&A transaction for a large block of VA's, Milliman developed a sophisticated model to determine the actuarial appraisal value for the block based on a range of alternative values for equity markets, prevailing interest rates, and market volatility as of the date of transaction closing. The resulting price grid was written into the contract terms, which (a) allowed the buyer to have a price adjustment that would make it whole economically for changes in market conditions prior to close, at which point it could implement a hedge strategy; and (b) provided the seller with a clear set of parameters it could use to design a hedge program to lock in the sales proceeds prior to closing. We facilitated a price adjustment mechanism that gave both buyer and seller confidence that the transaction would close at a fair price, regardless of interim market movements.