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📝 '''Indication of interest''' (sometimes abbreviated IOI) is a preliminary, non-binding expression from a prospective buyer or investor signaling willingness to pursue a transaction involving an [[Definition:Insurance carrier | insurance company]], [[Definition:Managing general agent (MGA) | MGA]], [[Definition:Insurance broker | brokerage]], or other insurance asset. In the context of [[Definition:Mergers and acquisitions (M&A) | insurance M&A]], an IOI typically follows an initial review of a confidential information memorandum and outlines the bidder's proposed valuation range, transaction structure, key assumptions, and any major conditions — without creating a binding commitment to proceed.

⚙️ The process usually unfolds within a structured sale managed by an [[Definition:Investment bank | investment bank]] or advisory firm. After signing a [[Definition:Non-disclosure agreement (NDA) | non-disclosure agreement]] and reviewing preliminary materials, interested parties submit their IOIs by a specified deadline. The seller and its advisors evaluate submissions based on price range, strategic fit, certainty of execution, and financing capability, then invite a shortlist of bidders into a more detailed [[Definition:Due diligence | due diligence]] phase that culminates in binding offers. In insurance transactions, IOIs often address industry-specific considerations: the bidder's view on [[Definition:Reserve | reserve adequacy]], the treatment of [[Definition:Contractual service margin (CSM) | contractual service margins]] under [[Definition:IFRS 17 | IFRS 17]], assumptions about [[Definition:Loss ratio | loss ratio]] trajectory, regulatory approval timelines across multiple jurisdictions, and the retention of key [[Definition:Underwriter | underwriting]] talent.

💡 While non-binding, an indication of interest carries meaningful practical weight. It signals to the seller that a bidder is serious enough to commit internal resources, and it anchors the pricing conversation that governs the remainder of the process. For insurance-specific transactions — particularly those involving [[Definition:Run-off | run-off portfolios]], [[Definition:Lloyd's syndicate | Lloyd's syndicates]], or businesses with complex [[Definition:Reinsurance | reinsurance]] structures — the quality of assumptions disclosed in the IOI can differentiate a sophisticated buyer from one likely to reprice aggressively after deeper diligence. [[Definition:Private equity | Private equity]] firms active in insurance have refined the IOI into a competitive art form, balancing aggressive headline valuations with carefully worded conditionality that preserves flexibility. Sellers who receive a wide spread of IOIs gain valuable market intelligence on how the industry values their book, even if the eventual transaction terms evolve substantially from initial indications.

'''Related concepts:'''
{{Div col|colwidth=20em}}
* [[Definition:Mergers and acquisitions (M&A)]]
* [[Definition:Due diligence]]
* [[Definition:Non-disclosure agreement (NDA)]]
* [[Definition:Letter of intent (LOI)]]
* [[Definition:Private equity]]
* [[Definition:Valuation]]
{{Div col end}}

Definition:Indication of interest - Revision history

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