IBNR Case
Situation:
A public U.S. policyholder seeking to enforce or protect its rights to insurance coverage against financially distressed insurers, as well as those that are already in liquidation and seeking to crystallize liabilities via the imposition of bar dates, was forced to choose between undertaking detailed future loss projections in support of an IBNR claim or forgoing its coverage completely. These projections can be expensive and may create inconsistencies with overall liability management objectives, as it can be difficult to reasonably estimate the fair value of its contingent liabilities.
Action:
GRC is an expert in developing future loss projections and modeling insurance allocations, as well as in negotiating with scheme administrators and advisors. As an independent principal and not an agent or advisor to the policyholder, GRC took assignment of the policyholder's claim, funded the cost of preparing and projecting the future loss scenarios and allocation models based on its proprietary database representing industry-wide data and experience rather than relying on a policyholder's limited experience in estimating its future liabilities.
Result:
The policyholder was able to obtain Liquidity for its insurance coverage asset that would only be triggered and impacted by its IBNR claim, while at the same time strategically managing its reporting requirements without losing value for its insurance coverage.
