Aon Plc with over 50,000 employees and a presence in 120 countries has been able to set up intellectual property (IP) collateral insurance policy in excess of $100 million USD (around £77.6 million).
This intellectual property collateral insurance policy of over 100 million USD is believed to be largest in the history of insurance in the UK where Aon Plc is headquartered.
Intellectual property insurance policy covers your company for the legal costs involved when pursuing infringement or theft of your intellectual property or when your company is sued for intellectual property theft. It’s also known as IP insurance.
An IP-rich company can borrow money from a lender while using their intellectual property as collateral. In this case, the value of the collateral was insured by a group of insurance markets championed by Markel Specialty.
According to the executive underwriter officer of professional liability insurance at Markel Specialty, Jim Gray, he believes that Markel Specialty is proud to have worked with Aon in crafting a unique solution, and looks forward to building this new market with Aon in the future.
The intellectual property backed lending transaction marks Aon’s rollout of its intellectual property capital market solution, which features the broker’s proprietary IP valuation tools.
Jim Young, chief financial officer at Indigo – which, through the structure, was able to raise additional funds while avoiding equity dilution – stated: “As an innovative company using microbial and digital technologies to facilitate positive transformation of the agriculture system, Indigo sought to find a way to collateralise its extensive IP asset portfolio.
“In a first of its kind deal, Aon leveraged an approach that articulated the value of our IP – making it a true capital asset – which allowed us to secure a significant amount of non-dilutive debt financing.”
For HSCM Bermuda partner Edouard von Herberstein, this is an example of insurance and insurance-linked securities markets offering risk transfer solutions for intangible assets, adding that they believe there are significant and growing opportunities and interest in this area.
“Intangible assets are the foundation of today’s global economy, and Aon is innovating first-generation solutions to help companies both protect and maximise the value of these important assets,” stated Aon chief executive Greg Case, who described the solution’s launch as a “watershed moment” that brings together Aon’s valuation technology with lenders and insurance markets.
Lewis Lee, CEO of Aon’s IP solutions, stated it clearly that they are assisting innovative growth companies with a path to non-dilutive growth capital. “We are excited to enable them to unlock this valuable asset,” said Lee, “and are now positioned to facilitate a wide range of transactions.”
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