Situation
High-profile coastal hotel, which was financed by an institutional lender as a stand-alone securitization, was at risk for windstorm, storm surge and flood. The borrower maintained a blanket policy covering multiple properties in the vicinity, with an insured value of over $1 billion.
Challenge
The lending group, investors and rating agencies had serious concerns over the adequacy of coverage considering the property’s high-risk location. Their expectations for credit neutrality was over $1 billion of wind and flood coverage on the property alone, while the policy provided significantly less coverage than the market standard for these perils.
Harbor Analysis
We obtained significant details regarding exposure under the blanket policy. We also investigated the subject property through site visits and sourced other relevant property, as well as historical and modeling data.
The Solution
After applying our proprietary insurance analytics, we designed and negotiated a ground-breaking solution with only specific adjustments. The adjustments did not materially increase the sponsor's insurance costs and was fully accepted by the lending group, investors and rating agencies.
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