Business case
Our client, a joint venture, developed, manufactured and distributed branded pharmaceutical drugs across the Middle East, Africa and the Commonwealth of Independent States. The client sustained a fire at its production facility leading to its business operations being interrupted for a period of 15 months. To recover the economic losses with respect to the property damage and business interruption, an insurance claim was submitted to the cedent insurer and global reinsurer.
The pharmaceutical sector is a highly regulated industry. Understanding specific internal and market developments is essential in deriving an accurate ‘but-for’ scenario when calculating the financial loss.
We were appointed by the client to quantify the financial loss resulting from the fire. Our role involved a detailed assessment of the loss of gross profit and the additional costs incurred to mitigate the financial loss. The expected ‘but for’ financial position was derived by analysing the historical rate of gross profit achieved for c.800 products, together with budgets reflecting sales price increases and growth in sales volume. We ultimately compiled a robust, fully substantiated claim for submission to the insurers for settlement.