We have unparalleled experience in bringing innovative restructuring and operational consulting solutions to complex and long tail liabilities in the Financial Services sector. Our team has particular expertise in Legacy Insurance and Insurance insolvency having acted as scheme adviser or administrator on both solvent and insolvent schemes.
We help clients who are:
We have unrivalled experience of assisting businesses to identify and understand the options available in dealing with new and existing challenges such as:
Our team has been responsible for creating and delivering many ground-breaking restructurings, including the first UK restructuring of a corporate with asbestos liabilities, the first scheme that dealt with mis-selling claims, the first scheme with electronic claim submissions and agreement, the first rectification scheme and the largest single non life insurance scheme.
We assist businesses in delivering the value associated with their strategic decisions by providing expert restructuring advice. We implement restructuring and finality solutions including the use of M&A strategy, schemes of arrangement, insurance business transfers, disposals and managed exits. Our advice allows capital to be released and recycled and certainty to be delivered to volatile liability issues.
We have advised on the majority of solvent schemes and some of the most complex and high-profile Part VII transfers and disposals in the sector, both UK and internationally, and delivered a wide range of redress to creditors and other stakeholders.
Our team will give an independent view of a business’ operations and use our expertise and experience to provide innovative suggestions for profit growth and overall improvement, such as:
We invest in digital solutions to ensure our services are backed by cutting edge technology, data and insights.
This includes processing and solving important problems at speed, presenting clear and interactive information, providing detailed insights and facilitating confidence while protecting data integrity.
We understand that your business can face many new and existing challenges and that sometimes when restructuring options are not practical, then protections available under a range of insolvency solutions may be required. We provide support in a number of areas, including but not limited to:
We work with management and stakeholders such as creditors, policyholders, compensation funds, guarantors, regulators and shareholders in insolvency situations to optimise the outcome for all parties involved. We routinely manage run-off managers who assist with day-to-day operations of the estates. Our objective is to work towards a timely exit solution that returns value to creditors at the earliest opportunity.
We use insolvency processes together with our innovative approach and processes as restructuring tools to deliver optimal outcomes at pace for the business and stakeholders through continuity and the preservation of value. Our current portfolio of insolvency assignments includes some of the largest and most complex in the market, such as Elite Insurance, Orion Insurance, Chester Street (formerly Iron Trades) and Stronghold Insurance. Please see an overview and latest information on our insurance assignments.
Deal Activity by Region – YTD 2023
We have published our 2023 Q3 update of non-life insurance run-off deals which provides an overview of legacy market developments and transaction activity including a list of publicly announced deals.
Highlights include:
Following the insolvency of a stockbroker, Beaufort Securities, who was facing various regulatory restrictions and serious fraud allegations, around 17,500 investors had their accounts frozen and could no longer access their £600m of cash and securities.
Large scale preservation needed to be implemented at speed. A team of over 30 specialists covering insolvency, financial services, forensic technology, tax and client assets were mobilised within 24 hours. After extensive support and reconciliation of client positions, alongside legal advisors, we developed and implemented the first ever Distribution Plan under the special administration regime. This helped to facilitate the fastest ever distribution under the Special Administration regime, with the first distribution for over 12,000 clients taking place in only seven months.
Over 98% of client assets and 99.8% of client money by value were returned to investors. The CEO of the Financial Services Compensation Scheme described the outcome as “a tremendous achievement, thanks to the continuing collaborative approach by both organisations (PwC and FSCS) to ensure that the majority of clients are now back on track.”
As Scheme Administrators, we are driven by our purpose and strive to do the right thing for Chester Street and its Creditors. Ensuring a continued delivery of high service and retaining the trust we have built up over the last 20 years, providing a market leading service to all Creditors, including the Financial Services Compensation Scheme.
Following challenges with the incumbent run-off provider, as a result of COVID, and driven by our ambition to transform the project and increase service delivery standards, we established an in-house claims management service with a ready made expert claims team who now manage the claims activity.
The transition has gone exceptionally well and a Creditors’ Committee member remarked that “The early PwC analysis and subsequent novel strategic approach to bring the claims handling in house was not without risk, but the potential pitfalls have all been addressed and the Committee left in no doubt that this was the correct and least risky approach from the Creditors’ perspective. Accordingly, the PwC team are to be congratulated for their insight, implementation and successful delivery of this difficult project.”
An overseas corporate identified a £250m portfolio of reserves relating to legacy business in their UK Branch that they decided to exit utilising a reinsurance arrangement, followed by an insurance business transfer.
We worked with their local and head office teams to develop a transaction rationale, which assessed the type of covers available and the different markets which could provide those covers. We examined the economics of completing the transaction, as well as key documentation explaining the transaction requirements, cover requirements, details of the reserves and any inherent risks and opportunities in the transaction.
After receiving multiple quotations we were able to achieve an increase in the security provided by the counterparty and a very significant reduction in the premium against their provision.
Elite Insurance wrote general insurance business, primarily through intermediaries, including motor, general liability, professional indemnity, warranty, legal expenses (including after-the-event), construction defect policies and surety bonds across many markets in Europe.
Elite’s reinsurer entered liquidation and this matter, together with continued reserve deterioration experienced in a number of business lines as well as issues with the collection of some of the assets base, led to the Elite becoming balance sheet insolvent and being placed in Administration.
Elite is a complex, multi jurisdictional insolvency and it is relatively early in the Administration. We are working vigorously to pursue asset and other recoveries, ensuring policyholder claims are dealt with appropriately, and paid by relevant compensation schemes, and reviewing the major books of business to implement strategies that will benefit creditors as a whole.
The largest UK non-bank lender faced financial uncertainty because of claims against it, as well as operational challenges that took up significant, valuable management time. PwC advised on a Scheme of Arrangement to bring finality to the volume of complaints. The scheme enabled the company to enter a managed wind-down of its business and its customers to obtain a better outcome than the alternative if the business had entered insolvency. This scheme was designed and promoted during the first half of 2021 and was successfully implemented following sanction by the High Court. PwC advised on scheme design, communications, scheme meeting arrangements and voting, provided data analytics and digital support to develop an automated claims assessment tool, developed a claims portal for customers to lodge claims and communicate with the company about the progress of their claims.
Head of Market Initiatives and Non-Executive Director Programme Chair, PwC United Kingdom
Tel: +44 (0)7778 211066
