ROUX AFRIQUEGROUP
ROUX AFRIQUE EVS · AFRICA & THE MIDDLE EAST
PRE-LOSS VALUES & EXPOSURES
ANTICIPATE · QUANTIFY · SECURE
An asset's value does not measure the value of the operations it supports
Roux Afrique EVS conducts Business Interruption Valuation & Exposure Studies designed to substantiate, before a loss, Business Interruption values, recovery assumptions and critical dependencies.
At the intersection of finance, operations and engineering, the engagement connects the insurance wording, financial records, budgets, production capacity and the recovery critical path within a documented, traceable and updateable BI Values Schedule.
BUSINESS INTERRUPTION EXPOSURE
Rebuilding a building or replacing a machine is not always sufficient to restore production, sales and the expected level of earnings immediately.
Investigations, permits, long-lead equipment, freight, customs, installation, testing, requalification, ramp-up, inventory replenishment and commercial recovery can extend the financial consequences well beyond physical reinstatement.
A BI value copied directly from the income statement or updated by applying a simple percentage may overlook:
A structured analysis makes it possible to:
The engagement substantiates declarative data and decision-making assumptions. It does not guarantee that an event will be covered, the amount of any indemnity or a reduction in premium.
SIX DECISIVE QUESTIONS
Gross Profit, Gross Revenue, Gross Earnings, Fees, Rent Receivable or another basis defined by the policy or proposed policy.
A projected value incorporating financial data, growth, seasonality, exchange rates, new capacity and the expected development of the business.
A clearly identified legal entity, site, activity, product, production line, currency and reference period.
An event, the assets affected, the loss of capacity, a duration and explicitly defined mitigation assumptions.
The full critical path from the event through to the level of operational and financial recovery adopted in the analysis.
Inventories, alternative capacity, outsourcing, production transfers, rental solutions, substitute purchases, expedited logistics and other measures that can genuinely be deployed.
SIX COMPLEMENTARY ANALYSES
Reconciliation of historical accounts, trial balances, budgets, forecasts and management information against the policy definitions.
The engagement identifies relevant income, insured expenses, Uninsured Working Expenses, standing charges, intercompany flows and the adjustments required to establish a documented BI value by entity, site, activity and currency.
Analysis of the time required to rebuild, replace, reinstall, test, recommission and regain the expected level of operations.
The Maximum Indemnity Period is reviewed by scenario and through sensitivity analysis. It should not be confused with the policy period, the physical repair period alone or a Recovery Time Objective.
Identification of processes, equipment, utilities, shared functions and infrastructure whose failure could interrupt multiple operations or sites.
The analysis considers residual capacity, redundancies, buffer stocks, standby equipment, critical spares, transfer options and substitution lead times.
Mapping of critical suppliers, customers, subcontractors, contract manufacturers, logistics platforms, ports, warehouses and other third parties.
For each dependency, the analysis considers the volumes involved, financial contribution, location, alternatives, qualification lead times and exposure concentrations.
Prospective quantification of the financial consequences of defined scenarios: capacity loss, monthly production profile, reduction in sales, earnings exposure and recovery trajectory.
Unmitigated economic impacts, the effects of mitigation measures and the analysis incorporating contractual parameters are presented separately.
Assessment of solutions capable of reducing the interruption:
Increase in Cost of Working — ICOW and Additional Increase in Cost of Working — AICOW are addressed separately. Whether they are recoverable depends on the wording, the economic test, the applicable conditions and sub-limits.
CONTRACTUAL BASIS
The income statement is an essential source. On its own, it does not determine the insurance basis.
Insurable Gross Profit is established in accordance with the definition and formula in the policy or proposed policy.
It does not automatically correspond to accounting gross margin, EBITDA, net profit or revenue.
Some activities or jurisdictions use other bases of indemnity. Their scope, projection method and declaration rules must be addressed separately.
Where the wording has not yet been finalised, several bases may be modelled, but each remains clearly identified as an assumption to be reconciled with the future policy.
Uninsured Working Expenses — UWE are expenses expressly designated as uninsured by the policy.
An expense that is economically variable is not automatically an uninsured expense. Its treatment must be reconciled with the wording and its actual behaviour in the event of an interruption.
Savings that may arise from an interruption are a separate concept from UWE defined before a loss.
The pre-loss study may model their probable behaviour, but only the post-loss analysis will establish the savings actually achieved.
A value applicable to a Maximum Indemnity Period of 18, 24, 36 months or longer should not be produced by mechanically multiplying the latest annual value.
The projection should take account, in particular, of:Any pro-rating rule, uplift or declaration-linked mechanism is applied only where the corresponding wording provides for it.
BI VALUES SCHEDULE
The BI Values Schedule, sometimes referred to as a BI Statement of Values, may structure values by:
For a multi-site group, intercompany flows are identified and eliminated where necessary to prevent double counting.
The BI Values Schedule remains strictly separate from the Property Damage Statement of Values, which presents buildings, machinery, equipment and other physical assets.
MAXIMUM INDEMNITY PERIOD
Site access, loss-mitigation measures, technical investigation, debris removal and any required remediation.
Design, engineering, permits, regulatory requirements, consultations and tender processes.
Selection of solutions, placing orders, manufacturing long-lead equipment, and the availability of parts and materials.
Transport, customs clearance, logistics access, reconstruction, erection and installation.
Testing, inspections, commissioning, regulatory qualification, and product or customer validation where required.
Progressive ramp-up, inventory replenishment, restoration of flows and recovery of the expected commercial level where included in the contractual basis.
The repair period, interruption period, recovery time, Recovery Time Objective — RTO, Maximum Tolerable Period of Disruption — MTPD and Maximum Indemnity Period serve different purposes.
Business Continuity indicators may inform the analysis. They do not replace the time limit defined by the policy.
INTERDEPENDENCIES
Depending on the engagement, the interdependency analysis covers:
Dependencies involving suppliers, customers, utilities, denial of access or interruption without physical damage may require specific extensions or dedicated cover.
No cover is presumed. The trigger, peril, damage requirement, designation of third parties, their tier within the supply chain, territorial scope, time deductible, limits and sub-limits must be reviewed in the applicable policy.
Digital scenarios and cyber-related interruptions fall within the remit of Roux Cyber, with financial input from EVS where this is included in the engagement.
METHODOLOGY
Define the purpose, entities, sites, activities, reference date, currencies, contractual bases, Maximum Indemnity Period, inclusions, exclusions and responsibilities.
Build a matrix linking policy definitions to financial line items: bases of value, UWE, payroll treatment, ICOW, AICOW, deductibles, extensions, limits and sub-limits.
This is a technical interpretation and does not constitute legal advice on coverage.
Review financial statements, trial balances, budgets, forecasts, monthly management reports, sales, volumes, prices, costs, inventories, intercompany flows and other relevant data.
The data is reconciled without presenting the engagement as a statutory or financial audit.
Incorporate trends, seasonality, inflation, exchange rates, capital expenditure, new capacity, contracts, closures and changes in the business mix.
Connect revenue to the sites, production lines, equipment, utilities, inventories, suppliers, customers and infrastructure on which it depends.
Bottlenecks, interdependencies and alternative capacity are identified.
Model a realistic sequence covering stabilisation, design, authorisations, procurement, reconstruction, installation, testing, recommissioning and ramp-up.
Quantify unmitigated and mitigated scenarios, test sensitivities and challenge the results against physical capacity, financial data and recovery assumptions.
Economic losses and their translation incorporating contractual parameters are distinguished.
Submit material assumptions to Finance, Operations, Engineering, Maintenance, Supply Chain, Commercial and Insurance leadership.
Following the draft version and resolution of documented comments, the final deliverables are issued with an updating protocol.
Every BI value must be linked to a wording, an entity, a period, a currency, a source, an assumption and a recovery scenario.
DATA ROOM
Depending on the engagement, the data sought includes:
Every missing item is recorded. Its impact, the replacement assumption and the corresponding confidence level are explicitly stated.
QA/QC
The QA/QC process covers, in particular:
An engagement cannot be issued where its contractual basis, perimeter, formulas or scenarios are not sufficiently defined to support a responsible conclusion.
INVENTYS® · VRA3D
Technology strengthens the structure, traceability and technical record of the engagement.
Inventys® structures the financial, operational and insurance data used during the engagement.
Where the site configuration warrants it, VRA3D helps to document critical assets, flows, bottlenecks, utilities and reconfiguration options spatially.
VRA3D is used only where it adds genuine technical value to the engagement. Technology strengthens the analysis; it does not replace validation by Finance and Operations or the experts' professional judgement.
DELIVERABLES
Depending on the engagement:
DECISION POINTS
Updating should also be triggered by any material change affecting revenue, expenses, capacity, dependencies, currencies or recovery times.
CRITICAL ENVIRONMENTS
Sectors served:
Our experts operate across Africa, the Maghreb and the Middle East, incorporating the realities of each location: imported supplies, local substitution capacity, freight, customs, skills availability, infrastructure, currencies and regulatory lead times.
CLEAR RESPONSIBILITIES
Establishes, before a loss, BI values, projections, dependencies, the recovery path and prospective scenario quantification.
Determines the reconstruction or replacement values of buildings, installations, machinery and other tangible assets. Its SOV remains separate from the BI Values Schedule.
Identifies and characterises assets. It may inform the BI analysis without determining Insurable Gross Profit or the Maximum Indemnity Period.
Analyses hazards, protection measures, vulnerabilities and physical scenarios. It provides the technical inputs required for EML, PML or MFL scenarios, whose BI component may be valued through this engagement.
The maximum BI scenario may differ from the maximum Property Damage scenario. EML, PML, MFL, SMP and SME must be defined in the engagement letter.
Reviews programme architecture, limits, deductibles, retentions, the Limit of Indemnity where applicable, Risk Financing and renewal strategy.
Roux Afrique EVS supplies the values and technical analyses without carrying out a regulated placement activity.
After a loss, establishes the loss actually sustained, savings achieved and increased costs incurred, structures the documented claim and supports its defence within the scope of its engagement.
The pre-loss EVS study does not predetermine the quantum of a future claim.
Analyses digital scenarios, cyber resilience and interruptions involving information systems and OT environments.
REFERENCES
The policy, its endorsements, applicable law and the facts of any loss remain decisive in determining coverage and indemnity.
Business Continuity standards determine neither Insurable Gross Profit, coverage nor the contractual Maximum Indemnity Period.
No generic standard, accounting formula or market practice is a substitute for reviewing the wording and the actual operating model.
FREQUENTLY ASKED QUESTIONS
It is an engagement designed to establish and document the financial values exposed to interruption, critical dependencies and recovery assumptions before a loss occurs.
Revenue measures sales. Accounting margin follows the organisation's financial-reporting rules. Insurable Gross Profit is constructed using the definitions, line items and formulas in the policy.
From the wording, financial statements, budgets, projections, insured or uninsured expenses, intercompany flows, Maximum Indemnity Period, scenarios and the operational characteristics of the business.
Not automatically. The projection should incorporate seasonality, growth, prices, volumes, exchange rates, new capacity and the recovery trajectory in accordance with the applicable wording.
By analysing the full critical path: stabilisation, design, authorisations, procurement, reconstruction, long-lead equipment, transport, installation, testing, ramp-up and return to the expected level of operations.
No. The RTO is a management objective for recovery to a defined level. The Maximum Indemnity Period is a contractual time limit that should be reviewed against realistic scenarios.
It may identify and quantify these dependencies where the engagement includes CBI. Their coverage remains subject to the policy's extensions, triggers, designations, territorial scope, limits and exclusions.
The Engineering Risk Survey selects and qualifies physical scenarios, vulnerabilities and technical lead times. The BI study translates their financial consequences using explicit assumptions.
The Roux Afrique EVS study is preventive and prospective. Following a loss, quantification of the loss actually sustained and preparation of the claim fall within the remit of Roux Afrique Claims.
No. Estimates are made as at a specified date using the information available and documented assumptions. Any indemnity remains subject to the insured event, causation, definitions, exclusions, deductibles, limits, sub-limits and the other conditions of the applicable policy.
SUBSTANTIATE THE EXPOSURE
Share your wording, current BI values, principal financial data, sites and recovery assumptions with us. Roux Afrique EVS will structure the scope, analyses and deliverables required for a documented, traceable and updateable Business Interruption declaration.
Speak with Roux Afrique EVS