February 11, 2013 by Canadian Underwriter
Chubb Group of Insurance Companies has released a new loss prevention guide meant to help directors and officers prepare for litigation if their firm engages in a merger or acquisition (M&A).
“Merger and acquisition activity is up, and many companies and their directors and officers are being sued as a result of these transactions,” Evan Rosenberg, senior vice president and global specialty lines manager for Chubb, said following the release of Director Liability Loss Prevention in Mergers and Acquisitions.
Rosenberg acknowledges that while it is impossible to prevent a lawsuit from being filed, directors may be able to increase their defensibility by following best corporate governance practices.
Recommendations in the 21-page guide, written by Dan A. Bailey, an attorney with Bailey Cavalieri LLC in Columbus, Ohio, include the following:
In Canada, Aon Risk Solutions recently reported the insurance industry could see more merger and acquisition activity in 2013, partly because of continuing low investment returns.
The current low interest rate environment, which looks like it will continue at least in the short term, means insurers must find “better ways to invest and deploy capital,” which could lead to more M&A activity this year, states Aon’s Canadian Insurance Market Report. That said, the report notes there is still significant competition among insurers.
With last year moderately low level of natural catastrophes, Aon adds that the Canadian market has strong capital levels.