Mio was developed with the input of a former M&A lawyer
A new online M&A insurance product has been launched in New Zealand to aid lawyers in tackling mid-market deals.
Dubbed Mio, the product is the first online M&A insurance product in the world, according to developers Fusion Specialty, and io.insure. The product is designed for buyers and sellers of businesses valued at or under $100m.
“Mio makes M&A insurance accessible to mid-market deals between $1 to $100m EV. It allows lawyers to offer a risk transfer solution to their clients for deals in this EV range that typically cannot access W&I”, Fusion partner Danielle Eliatamby told NZ Lawyer.
As a former M&A lawyer, Eliatamby said that she understood “the complexities and time constraints that lawyers face during M&A negotiations, especially when dealing with mid-market deals”.
“In my experience advising clients on these transactions, keeping legal costs down with limited scope due diligence and fee caps was of critical importance to clients,” she said. “This firsthand experience guided the creation of Mio's streamlined approach, where we aimed to leverage technology and automation to simplify the W&I process. I also drew on my experience in the drafting of the Mio policy and ‘Covered Risks’, which have been drafted simply, succinctly and in plain English”.
Eliatamby shared that Mio offers a standardised set of Covered Risks, which resemble synthetic warranties, that are shared with lawyers in advance “so they can know with certainty what the coverage will be under Mio and negotiate the SPA with that knowledge”. Mio’s digital workflow also incorporates a standardised digital questionnaire for underwriting.
“We share the questions in advance with lawyers, so they know what due diligence is required and what questions we will ask on every deal, at the outset of the deal. Lawyers can tailor their due diligence right from the beginning of their engagement with a client to ensure all relevant topics are covered off to get full coverage with Mio”, she explained.
According to io.insure managing partner Ian Hutchinson, an insured’s advisors can respond online to due diligence questions and deal information. This allows the algorithm to speed up an underwriter’s capabilities in risk review and quote delivery.
“When the advisors and client are ready to bind the policy, the client digitally signs a no claims declaration – and a signed policy and invoice are generated instantly on the platform. Ultimately, the entire process means a better experience for all involved – less time required and lower cost for the client”, Hutchinson said.
In the process, lawyers can give more time to strategic legal analysis and engaging with clients, “rather than being mired in the details of policy tailoring, drafting responses to bespoke underwriting questions, and spending time on underwriting calls”, Eliatamby told NZ Lawyer.
Mio was launched on 17 August in Auckland.
