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📊 '''Estimated completion statement''' is a financial statement prepared at or around the closing of an [[Definition:Insurance merger and acquisition (M&A) | insurance M&A]] transaction that sets out the target company's estimated [[Definition:Net asset value (NAV) | net asset value]], working capital, cash, debt, and other agreed financial metrics as of the effective closing date. In insurance deals, this document carries particular weight because the valuation of an [[Definition:Insurance carrier | insurance company]] or [[Definition:Managing general agent (MGA) | MGA]] depends heavily on items that are inherently uncertain — chief among them [[Definition:Loss reserve | loss reserves]], [[Definition:Unearned premium reserve | unearned premium reserves]], and [[Definition:Deferred acquisition cost | deferred acquisition costs]] — making the estimated completion statement a starting point for what is usually a contested post-closing true-up process.

⚙️ Typically, the seller prepares the estimated completion statement in accordance with agreed accounting policies set out in the [[Definition:Share purchase agreement (SPA) | share purchase agreement]], which may reference [[Definition:International Financial Reporting Standards (IFRS) | IFRS 17]], [[Definition:US GAAP | US GAAP]], or local [[Definition:Statutory accounting principles (SAP) | statutory accounting principles]] depending on the jurisdiction and regulatory context. The buyer then has a review period — often sixty to ninety days — to examine the statement and raise objections. In insurance transactions, disputes frequently center on the adequacy of [[Definition:Loss reserve | technical reserves]]: the seller may have booked reserves at a best estimate, while the buyer's [[Definition:Actuary | actuarial]] team applies more conservative assumptions. If the parties cannot agree on adjustments, the disagreement is typically escalated to an independent accountant or [[Definition:Expert determination agreement | expert determination]] process. The difference between the estimated figures and the finally agreed numbers drives a [[Definition:Purchase price adjustment | purchase price adjustment]] — either additional payment to the seller or a clawback from the [[Definition:Escrow account | escrow]].

🎯 For both sides of the table, the estimated completion statement is the financial anchor of the post-closing settlement. A seller who produces a clean, well-supported statement with transparent [[Definition:Actuarial analysis | actuarial]] backing reduces the scope for buyer objections and accelerates the release of [[Definition:Escrow account | escrowed]] funds. A buyer who scrutinizes the statement carefully — especially the treatment of [[Definition:Incurred but not reported (IBNR) | IBNR]], [[Definition:Reinsurance recoverable | reinsurance recoverables]], and [[Definition:Premium receivable | premium receivables]] — can identify material adjustments that protect against overpayment. In cross-border deals where the target operates across multiple regulatory regimes, such as an insurer with entities in both [[Definition:Solvency II | Solvency II]] jurisdictions and the U.S. state-based system, the preparation of the estimated completion statement can be especially complex due to differing reserving and capital recognition standards.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Purchase price adjustment]]
* [[Definition:Net asset value (NAV)]]
* [[Definition:Loss reserve]]
* [[Definition:Escrow account]]
* [[Definition:Expert determination agreement]]
* [[Definition:Closing condition]]
{{Div col end}}

Definition:Estimated completion statement - Revision history

PlumBot: Bot: Creating new article from JSON