In this episode of The SPAC Podcast, Machua “Motsch” Millett of Lockton Companies explains how underwriters assess risk when pricing D&O insurance policies for SPACs and their de-SPAC targets. The evaluation process is vastly different depending on where the SPAC is in its lifecycle and Machua walks through both sides of that underwriting equation.
For SPACs, there’s limited data, so the focus is on the sponsor team’s track record, industry focus, and prior deal outcomes. Underwriters also consider how speculative or volatile the target sectors may be (e.g., crypto vs. manufacturing). Once the SPAC announces a merger and transitions into the de-SPAC stage, underwriters can evaluate more traditional risk factors, including industry exposure, financials, and performance projections though Machua notes that recent SEC scrutiny has curbed overly optimistic forecasts.
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Machua Millett – Chief Innovation Officer, Lockton Companies
LinkedIn: https://www.linkedin.com/in/machuamillett/
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The views, opinions, and statements expressed by the guest are solely their own and do not necessarily reflect the views of The SPAC Podcast, its hosts, or affiliated organizations. This content is for informational purposes only and should not be construed as investment, legal, tax, or accounting advice.
Disclaimer: Michael J. Blankenship is a licensed attorney and partner at Winston Taylor. Joshua Wilson is a licensed Florida real estate broker and holds FINRA Series 79 and Series 63 licensure. The content of this podcast is for informational and educational purposes only and should not be considered legal, financial, or compliance advice. All views and opinions expressed by the hosts and guests are their own and do not necessarily reflect the policies or positions of any regulatory agency, law firm, organization, or employer. Listeners should consult their own legal counsel, compliance teams, or financial advisors to ensure adherence to applicable regulations, including SEC, FINRA, and other industry-specific requirements. This podcast does not constitute a solicitation or recommendation for any financial products or services.
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