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REAL ESTATE FINANCING AND REFINANCING:
ENVIRONMENTAL RISKS FOR BORROWERS AND LENDERS
MAY 13, 2015
MARSH 1
Primary Information
Secondary Information
• Bulleted text in Arial left aligned
• Paragraph spacing 0.6 lines befo...
MARSH 2
AGENDA
• Market Overview
• Risks – borrowers and lenders
• Solutions – borrowers and lenders
• Q&A
MARSH 3
Panelist Introductions
DIANNE CROCKER
EDR Insight
Principal Analyst
+1 203 783 8156
DCrocker@edrnet.com
SAMANTHA R...
MARSH 4
ENVIRONMENTAL RISKS ON PORT &
TERMINAL FACILITIES
DIANNE CROCKER
PRINCIPAL ANALYST
EDR INSIGHT
5
• COMMERCIAL REAL ESTATE IN 2015
• THE STORY IN PROPERTY LENDING
• NEAR-TERM FORECAST
1Q15 MARKET UPDATE
6
ALL THE KEY DRIVERS FOR PROPERTY DEMAND ARE TRENDING IN
THE RIGHT DIRECTION:
• HOUSING MARKETS RECOVERING NICELY.
• JOBS...
7
Small cap property sales:
+22% in 2014: 7-year high
Large property sales:
+45% in 1Q2015 (YonY)
PROPERTY TRANSACTIONS GR...
8
EXPANDING UNIVERSE OF U.S. BUYERS
• THREE TIMES AS MANY BUYERS IN ‘14 VS ‘09 IN THE DEPTHS OF
THE CRISIS.
9
• SMALLER SECONDARY MARKETS WITH STRONG GROWTH
PROFILES ARE SEEING INVESTOR INTEREST.
• COMMON DENOMINATORS:
• Strong jo...
10
MIGRATION TO SECONDARY METROS
TOP 10 HIGH-GROWTH METROS
FOR PHASE I ESA GROWTH:
1Q2015 (YonY)
Las Vegas, NV 52%
Columbi...
11
THE STORY IN LENDING
12
• 2015 FINANCING MARKET IS INCREASINGLY
COMPETITIVE.
• REGIONAL/LOCAL BANKS ARE GAINING MARKET
SHARE.
• LENDING STANDAR...
13
• A POSITIVE TRAJECTORY IN LENDING.
• 6.5% GROWTH IN 2014 (FDIC)
• ORIGINATIONS IN 2014 ABOUT 25% PERCENT BELOW
2007 PE...
14
• WIDE VARIATION IN LENDING BY BANK SIZE.
• STRONGEST GROWTH AT THE LARGEST REGIONAL BANKS AND
MID-SIZED BANKS.
• SIGNI...
15
• HEADING INTO NEW ROUND OF REFINANCING, PEAKING IN 2017
• LENDERS VIEW THIS WAVE OF MATURITIES AS OPPORTUNITY TO
INCRE...
16
• VYING FOR A PIECE OF THE REFI MARKET:
• Traditional lenders
• Life companies
• Conduits
• Private equity (non-bank le...
17
• CONSTRUCTION AND DEVELOPMENT
LENDING WAS THE FASTEST GROWING
CATEGORY OF CRE LOANS ACROSS
BANKS OF ALL ASSET SIZES.
•...
18
NEAR-TERM FORECAST
19
• STILL A LOT OF ROAD TO RUN IN THIS RECOVERY.
• RETURN TO HEALTHY 2005/6 LEVELS.
• MODERATE GROWTH IN NEW ORIGINATIONS...
20
• MUCH GREATER AWARENESS OF ENVIRONMENTAL DUE DILIGENCE.
• RISK MANAGEMENT IS NOW EVERYONE’S BUSINESS.
• PAST “DEAL KIL...
MARSH 21
ENVIRONMENTAL RISKS ON PORT &
TERMINAL FACILITIES
JARED DUBROWSKY
VICE PRESIDENT
GLOBAL ENVIRONMENTAL PRACTICE
MARSH 22
Framework for Addressing Environmental Risks and Solutions
• Individual Interests
• Aligned Interests
• Addressin...
MARSH 23
Common Environmental Exposures and Losses
– From an Individual Pollution Condition
Third Party
 Offsite cleanup
...
MARSH 24
• Spills
(Sudden)
• Leaks
(Gradual)
• Contractor
Tasks
• Expansion/
Mods/Maint.
• Legal
Req’ments
• Business
Inte...
MARSH 25
Risks Profile Vary Significantly based on Industry
Agriculture Healthcare
Automotive Industry
Aviation Manufactur...
MARSH 26
Environmental Issues in Real Estate Transactions
Storage Tanks
• Aboveground and underground
Asbestos
• Asbestos ...
MARSH 27
Environmental Due Diligence
• Has evolved for risk identification and to facilitate some protections to
“innocent...
MARSH 28
Regulation
• Various governmental agencies either require that banks conduct
environmental due diligence or have ...
MARSH 29
Borrower Objectives
• Unnecessary discovery, action and costs
• Governmental reporting
Minimize due diligence par...
MARSH 30
Lender Objectives
Dealing with Outstanding Bad Loans
Minimize Loan Credit Risk
• Environmental costs to borrower ...
MARSH 31
Common Objectives
• Address Costs and Enterprise threating risks from:
– Unknown pollutions conditions
– Known cl...
MARSH 32
ENVIRONMENTAL RISKS ON PORT &
TERMINAL FACILITIES
SAMANTHA RUNYON
SENIOR VICE PRESIDENT
GLOBAL ENVIRONMENTAL PRAC...
MARSH 33
Environmental Insurance
Environmental Insurance Tools
• Pollution Legal Liability / Environmental Impairment Liab...
MARSH 34
Environmental Insurance Tools
Pollution Legal Liability vs. Lender Liability
Feature Pollution Legal Liability Le...
MARSH 35
Environmental Insurance Tools
Pollution Legal Liability vs. Lender Liability
Feature Pollution Legal Liability Le...
MARSH 36
Environmental Insurance – Known Conditions
Cost Cap / Remediation Stop Loss
Insures cost overruns and controls pr...
MARSH 37
Environmental Insurance – Known Conditions
Environmental Liability Buyout or Guaranteed Fixed Price Remediation
E...
MARSH
QUESTIONS AND
ANSWERS
38
MARSH
Panelist Contact Information
DIANNE CROCKER
EDR Insight
Principal Analyst
+1 203 783 8156
DCrocker@edrnet.com
SAMANT...
This document and any recommendations, analysis, or advice provided by Marsh (collectively, the “Marsh Analysis”) are not ...
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Real Estate Financing and Refinancing: Environmental Risks for Borrowers and Lenders

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Real Estate Financing and Refinancing: Environmental Risks for Borrowers and Lenders
May 13, 2015

-Ed Morales, Senior Vice President, Marsh
-Dianne Crocker, Senior Analyst, EDR Insight
-Jared Dubrowsky, Vice President, Marsh
-Samantha Runyon, Senior Vice President, Marsh

As commercial real estate lending starts to slowly ramp up, it’s time to revisit the environmental risks associated with commercial properties—and how they can best be managed. Environmental conditions, unknown pre-existing factors and new releases can surface during the due diligence prior to loan origination and refinancing — and even during term of a loan. These risks can put financial strain on borrowers, and in the event of default, pose a significant risk to lenders.

Despite the exposures, there are several solutions that can protect your organization, its lenders, and other stakeholders.

The webcast will cover risks that borrowers and lenders face during real estate financing and insurance and other solutions that are available to mitigate them and enable financing and associated real estate transactions and development.

During the webcast, our panel of experts will discuss:
-Changing dynamics in today’s commercial real estate lending sector
-Environmental risks faced by lenders and borrowers
-Specialty solutions to manage environmental risks

Stakeholders who will benefit include:
-Risk managers at financial institutions
-Borrowers who purchase commercial real estate
-Real estate companies and developers
-Law firms

Published in: Real Estate
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Real Estate Financing and Refinancing: Environmental Risks for Borrowers and Lenders

  1. 1. REAL ESTATE FINANCING AND REFINANCING: ENVIRONMENTAL RISKS FOR BORROWERS AND LENDERS MAY 13, 2015
  2. 2. MARSH 1 Primary Information Secondary Information • Bulleted text in Arial left aligned • Paragraph spacing 0.6 lines before bullets – Second level copy with 0.2 lines before - Third level - Fourth Level - Fifth level ED MORALES SENIOR VICE PRESIDENT GLOBAL ENVIRONMENTAL PRACTICE
  3. 3. MARSH 2 AGENDA • Market Overview • Risks – borrowers and lenders • Solutions – borrowers and lenders • Q&A
  4. 4. MARSH 3 Panelist Introductions DIANNE CROCKER EDR Insight Principal Analyst +1 203 783 8156 DCrocker@edrnet.com SAMANTHA RUNYON Senior Vice President Marsh’s Global Environmental Practice +1 213 346 5759 samantha.j.runyon@marsh.com JARED DUBROWSKY Vice President Marsh’s Global Environmental Practice +1 212 345 4641 jared.dubrowsky@marsh.com
  5. 5. MARSH 4 ENVIRONMENTAL RISKS ON PORT & TERMINAL FACILITIES DIANNE CROCKER PRINCIPAL ANALYST EDR INSIGHT
  6. 6. 5 • COMMERCIAL REAL ESTATE IN 2015 • THE STORY IN PROPERTY LENDING • NEAR-TERM FORECAST 1Q15 MARKET UPDATE
  7. 7. 6 ALL THE KEY DRIVERS FOR PROPERTY DEMAND ARE TRENDING IN THE RIGHT DIRECTION: • HOUSING MARKETS RECOVERING NICELY. • JOBS ARE BACK PAST PRIOR PEAK LEVELS. • INTEREST RATES STILL EXTREMELY LOW. • PROPERTY INVESTMENT CONTINUES ITS SLOW CLIMB. • MORE NEW CONSTRUCTION/DEVELOPMENT. • NEW ACTIVITY IN A NUMBER OF SECONDARY MARKETS. THOUGHTS ON REAL ESTATE IN 2015
  8. 8. 7 Small cap property sales: +22% in 2014: 7-year high Large property sales: +45% in 1Q2015 (YonY) PROPERTY TRANSACTIONS GROWTH
  9. 9. 8 EXPANDING UNIVERSE OF U.S. BUYERS • THREE TIMES AS MANY BUYERS IN ‘14 VS ‘09 IN THE DEPTHS OF THE CRISIS.
  10. 10. 9 • SMALLER SECONDARY MARKETS WITH STRONG GROWTH PROFILES ARE SEEING INVESTOR INTEREST. • COMMON DENOMINATORS: • Strong job growth • Growing technology sectors, healthcare and financial services industries… BEYOND NYC AND SF: MIGRATION TO SMALLER METROS
  11. 11. 10 MIGRATION TO SECONDARY METROS TOP 10 HIGH-GROWTH METROS FOR PHASE I ESA GROWTH: 1Q2015 (YonY) Las Vegas, NV 52% Columbia, SC 42% San Antonio, TX 38% Charleston, SC 26% Milwaukee, WI 22% San Francisco, CA 19% Sacramento, CA 19% Stamford, CT 16% Portland, OR 14% Raleigh, NC 13%
  12. 12. 11 THE STORY IN LENDING
  13. 13. 12 • 2015 FINANCING MARKET IS INCREASINGLY COMPETITIVE. • REGIONAL/LOCAL BANKS ARE GAINING MARKET SHARE. • LENDING STANDARDS HAVE NOT CHANGED MUCH IN THE LAST YEAR. • UPTICKS IN LENDING VOLUMES SUPPORT POSITIVE INVESTMENT TRENDS… LENDING TRENDS THIS YEAR
  14. 14. 13 • A POSITIVE TRAJECTORY IN LENDING. • 6.5% GROWTH IN 2014 (FDIC) • ORIGINATIONS IN 2014 ABOUT 25% PERCENT BELOW 2007 PEAK. • Multifamily 25% higher than those 2007 volumes. • Absolute levels of multifamily lending should remain strong. LENDING: SLOW PACE OF GROWTH IN ORIGINATIONS
  15. 15. 14 • WIDE VARIATION IN LENDING BY BANK SIZE. • STRONGEST GROWTH AT THE LARGEST REGIONAL BANKS AND MID-SIZED BANKS. • SIGNIFICANT PULLBACK BY COMMUNITY BANKS. • GROWTH ESPECIALLY STRONG IN CONSTRUCTION/DEVELOPMENT AND MULTIFAMILY CATEGORIES. LENDING BY BANK SIZE Growth in CRE Loan Portfolios (2014 vs. 2013) All banks 6.5% Assets >$50B 4.1% $10B-$50B 16.8% $1B-$10B 10.5% <$1B -1%
  16. 16. 15 • HEADING INTO NEW ROUND OF REFINANCING, PEAKING IN 2017 • LENDERS VIEW THIS WAVE OF MATURITIES AS OPPORTUNITY TO INCREASE VOLUMES. • EXCESS CAPITAL LOOKING TO FINANCE SOLID REAL ESTATE DEALS. • EXPECTED TO FUEL A SURGE IN REFINANCING ACTIVITY FROM NOW THROUGH 2017. NEW ROUND OF REFI’S
  17. 17. 16 • VYING FOR A PIECE OF THE REFI MARKET: • Traditional lenders • Life companies • Conduits • Private equity (non-bank lenders, new this refi cycle) NEW REFI PLAYERS
  18. 18. 17 • CONSTRUCTION AND DEVELOPMENT LENDING WAS THE FASTEST GROWING CATEGORY OF CRE LOANS ACROSS BANKS OF ALL ASSET SIZES. • TOTAL CONSTRUCTION SPENDING IN 2014 HIGHEST SINCE DOWNTURN. • BEYOND KEY METROS (NY, SAN FRAN, BOSTON): 2015: THE YEAR FOR CONSTRUCTION LENDING HOT SPOTS: CONSTRUCTION AND DEVELOPMENT Denver Raleigh-Durham Suburban VA Oakland Las Vegas Austin San Jose Miami Seattle Portland
  19. 19. 18 NEAR-TERM FORECAST
  20. 20. 19 • STILL A LOT OF ROAD TO RUN IN THIS RECOVERY. • RETURN TO HEALTHY 2005/6 LEVELS. • MODERATE GROWTH IN NEW ORIGINATIONS. • CONTINUED MIGRATION TO SECONDARY AND TERTIARY MARKETS. “2015 WILL BE ONE OF THE STRONGEST YEARS WE’VE SEEN IN COMMERCIAL REAL ESTATE SINCE THE CREDIT CRISIS AND IT’S FOR ALL THE RIGHT REASONS.” KEN RIGGS, RERC “OPTIMISM IS HIGHEST IT’S BEEN SINCE THE DOWNTURN.” RYAN SEVERINO, REIS THE MARKET FORECAST
  21. 21. 20 • MUCH GREATER AWARENESS OF ENVIRONMENTAL DUE DILIGENCE. • RISK MANAGEMENT IS NOW EVERYONE’S BUSINESS. • PAST “DEAL KILLERS” ARE NOW BEING MANAGED. • PROPERTIES AND PROJECTS THAT FAILED ARE COMING BACK INTO THE MARKET. • MORE DEFERRED MAINTENANCE ISSUES ARISING ON REFIS OR NEGLECTED PROPERTIES. • PROPERTY CONDITION ASSESSMENTS GROWING IN IMPORTANCE. THE FORECAST FOR RISK MANAGEMENT
  22. 22. MARSH 21 ENVIRONMENTAL RISKS ON PORT & TERMINAL FACILITIES JARED DUBROWSKY VICE PRESIDENT GLOBAL ENVIRONMENTAL PRACTICE
  23. 23. MARSH 22 Framework for Addressing Environmental Risks and Solutions • Individual Interests • Aligned Interests • Addressing Conflicts Owner-Borrowers Lenders
  24. 24. MARSH 23 Common Environmental Exposures and Losses – From an Individual Pollution Condition Third Party  Offsite cleanup  Property Damage  Bodily Injury  Loss of value Regulatory and Legal  Natural Resource Damage  Toxic Tort Claims  Legal Defense Costs *  Off-site Disposal Legacy  Fines and Penalties  Governmental re- openers  Divested Properties Business Risks  Borrow Default  Business interruption  Loss of Rents  Increased development costs Defense can be important defending against frivolous and non-meritorious actions. 1st Party Cleanup  Known Conditions: cost overruns for pre- existing conditions  Discovery of unknown pre- existing conditions  New Conditions from operations  Re-opener of “closed” issues
  25. 25. MARSH 24 • Spills (Sudden) • Leaks (Gradual) • Contractor Tasks • Expansion/ Mods/Maint. • Legal Req’ments • Business Interruption • Lease terms • Acquisitions • Construction • Spills (Sudden) • Leaks (Gradual) • Legal Req’ments • Contract Req’ments Material Arrival On-Site Material Handling On-site • On-site Mgmt • Spills (Sudden) • Leaks (Gradual) • Air/Water • Legal Req’ments • 3d Party BI/PD Wastes • Spills (Sudden) • Leaks (Gradual) • Legal Req’ments • 3d Party BI/PD • Chemical Content • Emerging Issues Product • Waste Disposal Liability • Natural Resource Damages • 3d Party BI/PD • Legal Defense • Emerging Issues • Off-site contractors Off-Site Exposures Process/ Site Pollution Conditions Driven by Site Use What goes on now? What went on in the past?
  26. 26. MARSH 25 Risks Profile Vary Significantly based on Industry Agriculture Healthcare Automotive Industry Aviation Manufacturing Chemical Marine Education Tech & Telecom Forestry Products Transportation General Industry
  27. 27. MARSH 26 Environmental Issues in Real Estate Transactions Storage Tanks • Aboveground and underground Asbestos • Asbestos is a mineral fiber that was commonly used in many building materials prior to being banned in the early 1980’s. Lead Paint • Lead was a common ingredient in paint prior to it being banned in 1978. Mold • Cleanup and health impacts
  28. 28. MARSH 27 Environmental Due Diligence • Has evolved for risk identification and to facilitate some protections to “innocent landowners” • All Appropriate Inquiries (AAI) • Transaction Screen Reports • Phase I Environmental Site Assessment • Phase II limited subsurface investigation report. – “To do or not to do. That is the question” • Baseline for insurance solutions
  29. 29. MARSH 28 Regulation • Various governmental agencies either require that banks conduct environmental due diligence or have a procedure in place for addressing environmental issues. • Office of the Comptroller of the Currency (OCC) • Federal Deposit Insurance Corporation (FDIC) • United States Small Business Association (SBA)
  30. 30. MARSH 29 Borrower Objectives • Unnecessary discovery, action and costs • Governmental reporting Minimize due diligence particularly Phase II investigations • Minimize environmental costs to operating financials • Eliminate risks that could be enterprise threatening Operating portfolio risks • Initial financing • Refinancing • Securitization impacts Secure favorable financing • Costs and Uncertainties • Indemnities Address environmental obstacles to enable successful acquisitions and divestitures
  31. 31. MARSH 30 Lender Objectives Dealing with Outstanding Bad Loans Minimize Loan Credit Risk • Environmental costs to borrower could result in default. • In the event of default, Lender can be responsible for the cleanup .Exercised significant management control • The cost to remediate the contaminated property can exceed the principal amount of the underlying loan. • Business Impacts: ̶ Corporate Lending Standards. May pass on otherwise manageable & profitable loans. ̶ Drives due diligence requirements onto Borrower which can be in conflict with Borrower’s goals. • Facilitating Sale of assets • Dispose of liability at favorable terms • Control Environmental Risks ̶ Unknown pre-existing conditions ̶ Known cleanups
  32. 32. MARSH 31 Common Objectives • Address Costs and Enterprise threating risks from: – Unknown pollutions conditions – Known cleanups • Complete All Appropriate Inquiry but minimize-eliminate unnecessary Phase II work • Explore cost-effective alternatives to address environmental risks around objectives
  33. 33. MARSH 32 ENVIRONMENTAL RISKS ON PORT & TERMINAL FACILITIES SAMANTHA RUNYON SENIOR VICE PRESIDENT GLOBAL ENVIRONMENTAL PRACTICE
  34. 34. MARSH 33 Environmental Insurance Environmental Insurance Tools • Pollution Legal Liability / Environmental Impairment Liability • Lender Liability / Secured Creditor A Strategic Risk Management Tool • Can provide coverage for claims related to both historical and operational pollution conditions. • Can provide coverage for “unknown” environmental conditions and regulatory re-openers/changes in regulations. ̶ Cleanup costs ̶ 3rd party liability (bodily injury and property damage) ̶ Legal defense • Available on both individual transaction and on a portfolio basis. • Can protect either or both the lender and/or borrower.
  35. 35. MARSH 34 Environmental Insurance Tools Pollution Legal Liability vs. Lender Liability Feature Pollution Legal Liability Lender Liability Overview Designed to provide protection for unforeseen / unknown contamination Designed to provide protection from financial loss due to a pollution event First Named Insured Typically borrower however can be lender. Lender can be added via a additional insured mortgagee Lender Cleanup Costs Yes, for new releases or unknown pre- existing conditions Yes, for new releases and unknown pre- existing conditions. Can also include coverage for known conditions. 3rd Party Bodily Injury / Property Damage Yes Yes Trigger 1st party discovery or 3rd party/governmental claim Dual Trigger: Default on loan and pollution event. 1st party discovery is provided only after lender has foreclosed on property Claim Payment Cleanup costs and/or 3rd party liability claim(s) Lessor of outstanding loan balance or estimated cleanup costs Maximum Term 10 years Can be provided up to maturity of loan Underwriting Environmental reports Underwrite to financials (collateral, equity, etc.) as well as environmental reports available
  36. 36. MARSH 35 Environmental Insurance Tools Pollution Legal Liability vs. Lender Liability Feature Pollution Legal Liability Lender Liability Markets 20+ XL and Zurich Limits Over $250M+, carriers willing to sit excess of each other $50M Known Conditions Excluded Can be covered based on financial risk Individual Transaction Yes, benefits are: • Addresses environmental concern • Can be used in lieu of financial guaranty or escrow • Can be placed quickly • Dedicated limits for property Yes, benefits are: • Addresses environmental concern • Can be used in lieu of financial guaranty or escrow • Can be placed quickly • Dedicated limits for property Portfolio Transaction Yes Yes, benefits are: • True risk transfer mechanism • Streamlines the loan process • Cost of insurance is typically less than a Phase I • Can provide lender a competitive advantage • Can add sites as necessary
  37. 37. MARSH 36 Environmental Insurance – Known Conditions Cost Cap / Remediation Stop Loss Insures cost overruns and controls price uncertainty on Remediation – Cleanup Projects • Actual extent of contamination is greater than estimated. • Actual degree of contamination if greater than anticipated. • Previously unidentified contaminants have been discovered. • Increased time for remediation (capital implementation and O&M). • Offsite cleanup of contamination adjacent to the covered site is assumed. • Changes in Cleanup Standards. • Governmental change in cleanup requirements. Coverage available through AXIS and BEAZLEY • Limits up to $10M - $15M per project. • Terms up to 10 years. • Upfront cost is premium and associated taxes. • Pricing: Rate on line 15-17%, Buffer 30 to 45%, Co-insurance 10%.
  38. 38. MARSH 37 Environmental Insurance – Known Conditions Environmental Liability Buyout or Guaranteed Fixed Price Remediation Environmental Liability Buyout • Is the contractual transfer of cleanup obligation and other liabilities to a third party contractor. • Contractor also assumes liability with agencies. • Environmental insurance covers the third party and client. • Requires full funding of remedial costs and associated risk transfer elements at the time of the transaction. Guaranteed Fixed Price Remediation • Client retains environmental liability. • Third party contractor provides fixed costs bid to achieve end-point for cleanup. • Insurance covers client and the third party. • Initial out of pocket costs is the insurance and associated taxes.
  39. 39. MARSH QUESTIONS AND ANSWERS 38
  40. 40. MARSH Panelist Contact Information DIANNE CROCKER EDR Insight Principal Analyst +1 203 783 8156 DCrocker@edrnet.com SAMANTHA RUNYON Senior Vice President Marsh’s Global Environmental Practice +1 213 346 5759 samantha.j.runyon@marsh.com JARED DUBROWSKY Vice President Marsh’s Global Environmental Practice +1 212 345 4641 jared.dubrowsky@marsh.com ED MORALES Senior Vice President Marsh’s Global Environmental Practice +1 415 743 8023 ed.r.morales@marsh.com
  41. 41. This document and any recommendations, analysis, or advice provided by Marsh (collectively, the “Marsh Analysis”) are not intended to be taken as advice regarding any individual situation and should not be relied upon as such. This document contains proprietary, confidential information of Marsh and may not be shared with any third party, including other insurance producers, without Marsh’s prior written consent. Any statements concerning actuarial, tax, accounting, or legal matters are based solely on our experience as insurance brokers and risk consultants and are not to be relied upon as actuarial, accounting, tax, or legal advice, for which you should consult your own professional advisors. Any modeling, analytics, or projections are subject to inherent uncertainty, and the Marsh Analysis could be materially affected if any underlying assumptions, conditions, information, or factors are inaccurate or incomplete or should change. The information contained herein is based on sources we believe reliable, but we make no representation or warranty as to its accuracy. Except as may be set forth in an agreement between you and Marsh, Marsh shall have no obligation to update the Marsh Analysis and shall have no liability to you or any other party with regard to the Marsh Analysis or to any services provided by a third party to you or Marsh. Marsh makes no representation or warranty concerning the application of policy wordings or the financial condition or solvency of insurers or reinsurers. Marsh makes no assurances regarding the availability, cost, or terms of insurance coverage. Marsh is one of the Marsh & McLennan Companies, together with Guy Carpenter, Mercer, and Oliver Wyman. Copyright 2015 Marsh LLC. All rights reserved.

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