Mitrovic Consulting

In the early 1980s, corporate risk management had a significant blind spot. Traditional insurance addressed risks such as fires, automobile accidents, and professional malpractice. But what about a multimillion dollar lawsuit already pending against a company, with an uncertain financial outcome hanging over its head? That was the challenge I set out to address at AIG in the early to mid-1980s, helping pioneer transactional insurance solutions, including tax liability, repres

I pioneered the representation and warranty (“R&W”) insurance business in the early 1980’s by responding to private equity asset sellers and their large law firm counsel, seeking an insurance solution to eliminate the seller escrow holdbacks required by acquirers to assure cash was available to compensate for breaches of seller R&W in the sale transaction, thus preventing a full cash distribution of sale proceeds. The alternative was a deep buyer discount to the cash purchase

Finite insurance is an insurance contract lasting several years in which the insured pays a premium into a fund managed by the insurer. If losses are low at the end of the term, the insured gets a refund. If losses exceed the limit, the insured pays an additional premium or the deal ends. In essence, it is a combination of self insurance and capped, limited risk transfer. AIG wrote a finite risk policy for Phil Ritson, a well known South African golf professional, instructor,

With today's discussions about developing new and advanced nuclear energy facilities to support the extraordinary power demands of artificial intelligence and the military, perhaps we should look back at the adverse loss development that accompanied the nuclear buildout of the late 1970s and 1980s. Three Mile Island in Pennsylvania in 1979 and Chernobyl in Ukraine in 1986 fundamentally changed the risk environment surrounding nuclear power. The consequences extended well beyo

One of the lessons I learned working with private equity and transactional insurance is that a known liability does not necessarily have to kill a transaction or even permanently depress a company’s valuation. A company or asset may have a significant underinsured or uninsured liability—litigation, environmental exposure, a toxic tort claim, or another contingent risk—that neither the buyer nor the seller wants to retain. The buyer may respond by substantially discounting the

In the late ’80s and early ’90s, I had the opportunity to develop yet another transactional insurance product in addition to representations and warranties insurance. That product was contingent liability insurance—a solution for underinsured or uninsured liabilities that were preventing the sale or purchase of companies or assets and, in some instances, inhibiting market capitalization growth and share appreciation. Typically, in these transactions, I would incorporate non-d