Assessing the Value of an Emerging Insurer

The Situation

In a dispute arising out of a failed sale of the controlling interest in an insurance company, the seller sued the buyer alleging breach of contract. The insurer was subsequently sold to a third party.

NERA's Role

NERA was engaged to provide a valuation of the insurance company on the date of breach, as well as an assessment of the change in value of the insurer between the time of the failed sale and the eventual sale. NERA analyzed the opposing expert’s valuation based upon comparable insurers and discussed the importance of selecting comparables with similar lines of business and similar size and scale. NERA’s analysis discussed changes in market conditions, many driven by changes in competition among insurers over the period in question that decreased the expected earnings of the company.

The Result

The case is pending.