← Risk in Context Podcast
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- [00:14]
A
Welcome to Risk in Context, which features conversations with Marsh colleagues, risk professionals, and others intended to help you better understand key risks, build more effective insurance programs, and think creatively about risk. Will I'm Will Fahey, Managing Director at Marsh, and today we're going to be discussing IPOs. The initial public offering or IPO market has evolved significantly over the last several years, although the number of filings in recent years has been somewhat lower than in the past. In 2026 we finally seen an uptick in the number of companies going public and heightened appetite in the insurance market to right these risks. For companies considering an IPO today, the biggest questions revolve around their level of readiness to go public, finding the right time to file amidst market volatility, recent changes in state law regarding venue and where to incorporate, and taking preemptive action to address the multiple risks that are intrinsic to becoming a public company, from disclosure and governance obligations to litigation exposure and insurance considerations. In today's episode of Risk in Context, I am joined by my colleague Robin Stevens, Managing Director at Marsh, and Paul Kardash, the General Counsel at Madison Industries, which went public through an IPO earlier this year. We're going to discuss the current IPO landscape, explore the risks that organizations should consider as they start the journey to go public, as well as some of the actions they can take to improve the odds of successful listing. Paul and Robin, it's great to be with you today. Could I ask you to please introduce yourselves?
- [01:35]
B
Paul thanks Will. Great to be here with you and Robin as well. So my name is Paul Kardish. I am the General Counsel at Madison Industries. I have been working in the in house space probably the last 25 years. I was general counsel at Schneider national which went public and 2017, and chief legal officer at the AZEC company which went public in 2020. Was very fortunate. I've had a very fortunate career and was able to be a part of the team that took Madison Air public middle of April this year. Robin yes.
- [02:10]
C
Hi. Robin Stevens. I lead Marsh's New York Financial Lines client Advisory team. I've been with Marsh a little over six years now and prior to that I spent 10 years in the underwriting community.
- [02:22]
A
Excellent. All right, thanks Robin. Thanks Paul. Let's get started. IPO activity has rebounded this year in recent years, although it's still been somewhat subdued from the SPAC boom that we saw in 2020 and 2021 when more than 600 companies went public. Last year we saw something of a recovery where 44 billion was raised through IPOs which is the highest we've seen in five years. In the first half of 2026, over 75 companies have gone public, raising more than 110 billion in US dollars in proceeds. SpaceX might have had a little bit something to do with that capital number there. And many companies are watching the market closely, waiting for the right time to go public. These companies come in many colors. There are life sciences companies, AI startups, unicorns, and there's also a large number of late stage mature private companies, including companies held by private equity firms, who remain on the sidelines, looking for the right time and opportunity to go public. Robin, what are you hearing from prospective IPO companies who are looking to determine when's the right time for them to start the IPO process?
- [03:20]
C
Yeah, thanks, Will. Many of the companies we spoke to have been IPO ready for some time, but delayed their listing due to unpredictable market conditions, elevated interest rates, and really an abundance of private capital that allowed for companies to fund operations without feeling the pressure of accessing public markets. As you mentioned earlier, you know, macroeconomic and policy uncertainty drove down market sentiment significantly. So much so that going public in 2024 meant accepting a significantly reduced valuation for most companies. As some of these headwinds started to ease, IPO activity picked back up in 3Q25, and we're now seeing a surge in activity. The successful rollout of Several high profile IPOs has emboldened the market.
- [04:02]
A
Yeah. And presumably they feel they can get a better valuation now than they could a couple years ago. To your point, Paul, you took Madison public in April. Can you please share some of the factors that helped you decide that was the right time for you to go public?
- [04:16]
B
Yeah, I think with Madison Air. Will, thanks. It really came down to it wasn't a matter of if, but when we were going to go public. And I think what Madison Air was looking for was a permanent capital structure. And I think the, the markets provided this to Madison Air. I think as we, you know, look at going public and being the chief legal officer at three different companies that went public, there's really never a perfect time to go public. It really comes down to sort of picking a spot or an opportunity and just going. And I think with Madison Air, it really came down to we were going to go public regardless. We had a great financial profile, a great equity story, and a really seasoned management team. And we had engaged in a lot of the public readiness prior to going public. So we really felt like it was just a matter of when we were going to Go. And I think with all the uncertainty around Iran, it really created opportunities and pressure in the market. But, you know, we just had to make a decision to go. And I think as we looked at our financial profile and leadership made the determination that, you know, there's really not going to be a perfect time. We're just going to go. And we ended up going. And I think it really worked out very well.
- [05:33]
A
And I think one of your prior companies, Paul Azak, I mean, went public in 2020. You know, there was market uncertainty then, too, with COVID right?
- [05:41]
B
Correct. It's ironic that in February, late February of 2020, we were actually downtown in New York ready to start the roadshow for Azek to be listed. And it was actually the last week of February when the markets just went south. I think there were two or three days in a row where it went down, you know, several percent. And we ended up deciding to, you know, sort of pull the ipo. We waited three months, and I think with everybody sort of in self isolation, we noticed there was a return to home renovation and improvement, and it really lifted azec. And we were actually the second company to go out public post Covid, and it was a virtual roadshow, and it turned out to be a great success story. So we were really fortunate that that worked out.
- [06:34]
A
Yeah. So very different market challenges you faced with Madison Air. There's never going to be a perfect time when there's no market uncertainty to go public. But, you know, timing matters and preparation matter, you know, even more just as much. And maybe that's a good time to pivot to discussing what companies need to do to focus in preparation for a filing. You know, Robin, you mentioned a lot of IPO candidates right now are mature private companies, and they've got governance structures that may approach those of a public company. And others are also true startups that need to establish governance and compliance structures in order to succeed once they're publicly traded. Getting that right changes the outcome of a successful ipo, to Paul's point, as well as the odds of future litigation. You know, there's a recent securities class action that was filed in Delaware against a private company IPO candidate alleging insider trading prior to an ipo, for example. So I should also add that Marsh has recently released an IPO guide which helps companies better navigate IPO risk. There's going to be a link to the show Notes in this podcast for anyone who wants to look at that. Robin, could I ask you to share some of the top issues companies should consider in building a DNO program and as they prepare to go public.
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C
Yeah, sure. I mean, building a DNO program, especially ahead of an IPO involves navigating complex choices to align coverage with the company's values and risk tolerance. Many companies opt for policies that protect both the entity and individual individual directors and officers, sometimes with shared limits. So to avoid exhausting limits on large claims, additional limits dedicated solely to individual directors and officers, or specifically to independent board members, may be purchased. So determining the appropriate limit is increasingly data driven, important to review peer benchmarking along with a detailed analysis of the company's litigation and potential for settlement amounts. So, you know, last but not least, ensuring that your coverage has continuity when it transitions from private company insurance to public company insurance is important. Right. There are vast coverage differences, and ensuring roadshow coverage is particularly important to bridge the gap between private company and public company exposures.
- [08:43]
A
And Robin, this year you've been involved in a couple of significant coverage features that have not previously been part of IPO policies that we've seen in the market, which is unusual. We don't see that every day. But could you maybe comment on a couple of the things that you're getting now when we place a policy for a company going public in an ipo, which we just weren't able to get a couple of years ago.
- [09:02]
C
Yeah. The insurance environment for companies going public has improved dramatically. We've seen reduced pricing, increased capacity, and many companies have been able to secure more robust coverage, such as underwriters indemnification coverage or coverage for entity investigations. The underwriter indemnification coverage is increasingly attractive as we've seen an uptick in the number of lawsuits that also name the bankers. Right. That support the companies going through their IPOs and those, those indemnification obligations that companies have to the bankers are balance sheet risks. So having this outlet. Right. In order to risk transfer to the insurance policy is becoming increasingly more attractive to our clients.
- [09:43]
A
Yeah, that's really exciting stuff for us. I mean, we haven't seen the ability to identify underwriters or entity investigations coverage be a part of these policies in the past. So that's really a, you know, a huge improvement for our customers. Paul, I mean, given that going public is, you know, a very risk on exercise, could you, you know, maybe explain a little bit about the things that surprise you about the preparation process or particular issues that you might have considered addressing earlier? In hindsight, that's a great question.
- [10:09]
B
Well, one of the things I will tell you is something my dad told me when I was growing up. And I hated hearing it for so often, which was proper prior planning prevents poor performance. And I think with the IPO process that is, that is so true. Like you really have to make sure you have your house in order. And I think, you know, as I think about this thing like presidential elections, there's always that October surprise. There's going to be something that's going to come up and I think so if you can minimize any other sort of surprises that come up by, you know, preparing in advance, you're going to be way ahead of the game. So, you know, again, because there are so many moving parts to an IPO where you've got SEC reviews, you've got external auditors, you know, both, especially during the transition from private to public. You've got two different sets of auditors. You've got, you know, at Madison Air, we had actually three different sets of auditors because we had acquired a company, April Air, just before we started the process for the ipo. So from, from my, my standpoint, you just have to be prepared for the unexpected and be ready to go when, when that unexpected event hits.
- [11:23]
A
Yeah, that, that, that sounds very exciting. So you mentioned presidential elections. Let's talk about the sort of political climate right now. Like we're definitely seeing very issuer friendly SEC at the moment. And you know, one thing that's very interesting in particular with respect to the SpaceX IPO that just occurred, not only was that the largest initial public offering in history, but there's other reasons why this IPO was so monumental. The Wall Street Journal used the term transcendent significance to describe the importance of the fact that SpaceX is incorporated in Texas, having moved its incorporation from Delaware to Texas just a couple of years ago. And in doing so, they were able to take advantage of more favorable law in Texas, where securities class actions are going to be adjudicated in arbitration as opposed to federal court. The SEC earlier this year blessed that and said they wouldn't object to that. This is the first time we've seen a company go public where in their bylaws they've had a provision that would dictate that securities cases have to be heard in arbitration as opposed to federal court. It wasn't that long ago, a few years ago, that we, you know, had a risk of being in state court for these suits, which really, you know, resulted in elevated IPO litigation activity. So this is all something that's very new and presumably very favorable for issuers. Robin, I'd be interested in your thoughts. Could you talk about the Importance of this and how it can pave the way possibly for other companies?
- [12:45]
C
Yeah, absolutely. I mean, it is so new and we're definitely watching it closely. I mean, requiring arbitration as opposed to allowing claims to go through the court system is going to help lower costs. It usually results in faster dispute resolution as well as sort of an increased privacy element that's, you know, of interest to several founders. It's definitely viewed as a pro issuer benefit. Right. And it's something that we are tracking to make sure that we're advising our clients on if and when this provision is ever invoked or used and how it's plays out.
- [13:16]
A
Yeah, it's going to be really interesting to watch. And presumably you'd see other people do this. I mean, Robin, could you talk about some of that? We've talked a little bit about coverages that are available now. We have this new favorable venue aspect that's going to be incredibly interesting to watch. Could you talk about some of the other things that we're seeing in the market right now, you know, in terms of, say, underwriter appetite or anything else that are positive for public companies?
- [13:39]
C
Sure, yeah. I mean, I think it's important to note that the underwriter appetite to cover new public companies has evolved over the years. Right. There was a period of time where issuers were being sued in state court, as you mentioned. Right. Pursuant to Supreme Court scion decision. And at that time, the underwriters felt that the risk of lawsuits outweighed that lure of new, new premium, new business, because the chances of being sued in an unfavorable venue were so high, that issue has dissipated. Right. It was addressed in 2019, returning Section 11 IPO suits back to federal court. So today. Right. For underwriters, the benefit of having more new public companies to write is largely outweighing the significant risk that is that still presents. Right. With the litigation of going public. So we do see sort of a basic supply and demand curve here. Right. Where the insurance markets are excited about the number of IPOs coming out and they are increasingly more competitive with their offerings, not just from a pricing perspective, but also starting to become very creative
- [14:40]
A
with coverage innovation and I think also limits. Right. I mean, just not that long ago we were only seeing 5 million limits, and now we're seeing 10 million limits pretty regularly.
- [14:49]
C
Absolutely. Yes.
- [14:51]
A
Yeah. So it is. That is interesting, Robin. I think that's well said. I mean, you know, I would say probably 10 years ago, after Cyan, when you were in state court, insurer concerns about the risks, you know, outweighed the lure of new business. And right now it feels like the pendulum swung the other way. Paul, if I could maybe turn to you as a buyer, like, how are these insurance considerations factoring into how you purchase a policy for your IPO exposures? Robin mentioned the data driven analytics that are now part of our recommendation on limits. If you could maybe talk about all the things that factored in your decisions buying an insurance program, that would be great to hear.
- [15:28]
C
Yeah.
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B
I mean, if you think about it, the IPO is really sort of the birth of a new company. Right. And when you're doing that, I think the most important thing to do that people sometimes overlook is conducting an insurance health check because it's really part of establishing a new company. And as you're onboarding new public company board members, it's really important to them that they have adequate coverage. So I feel like, you know, as you're getting your financial house in order, you're looking at your insurance programs, you're onboarding new board members who are public company ready, you're getting your, you know, company public company financial ready. And it's, for me, it's really important to sort of marry all these together and be prepared to look at insurance in a way that's going to make sense to the company. It's going to feel give some comfort to the new board members. And it's also going to give comfort, I think, to the street that you're adequately insured.
- [16:27]
A
Did you have any concerns about, you know, in purchasing higher limits that, that might, you know, that might have seemed, you know, like an adverse risk factor for underwriters or anything like that. In terms of your decision on limits, what, what really drove that decision?
- [16:41]
B
I think it's the financial profile of the company. You know, it's how much risk are you willing to accept? And I think that's a big part of it. You know, for an example, looking back at the ASAC timing, which was in 2020, was, you know, a year and a half after the cyan decision, you know, we paid twice the premium for half the coverage that we did. Looking at, you know, an apples to apples comparison with Madison Air and anything
- [17:05]
A
in particular from the financial reporting or governance structure that you guys particularly focused on or did differently in the lead up to going public.
- [17:13]
B
Yeah, I mean, it's really like I've said earlier, and it is so true. It's getting your financial house in order and it really becomes getting ready to, you know, honor the requirements of Sarbanes, Oxley or Socks. It's Also being able to have good financial controls and controls across the whole enterprise, which a lot of private companies do not have. So, you know, again, that process, it has a long tail to it. So as you're preparing for the ipo, you're also preparing to get your financial house in order to be Sarbanes Oxley, you know, compliant, but then also having the controls in place that, you know, give adequate assurance to your board members, to the officers and to the street at large.
- [17:59]
A
Yeah, no small task, to be sure. Well, congratulations on doing that successfully a couple of times. I'm sure you're going to be looking to do that again in the future. We wish you the best on that. Robin, any, you know, final thoughts in terms of selecting the right insurance advisor?
- [18:14]
C
Yeah, absolutely. I think, you know, one point I'll make, and I'm glad Paul made it as well, right, that the pricing here has come down materially from, you know, heightened levels, levels in 20 and 21. But the price of public company DNO is still significantly higher than that of private company dno. And many of the clients we speak to have an element of sticker shock, right. When they see sort of the jump in cost, not just because it's more limit, but each layer is just incrementally more to account for that increased exposure and increased risk transfer. And in addition to that, I think selecting the right insurance advisor is critical to building out that robust risk transfer strategy. So organizations should consider a team that provides consistent service, advocacy, industry specialization in order to better understand each company's specific needs.
- [19:05]
B
And Robin, if I could just echo one thing, and this is not a plug for Marsh, but it is a plug for Marsh. So I've worked with Marsh on two different IPOs, Schneider and with Madison Air. And I will say I have never been more impressed with the level of detail that the team prepares for management and for the board in terms of evaluating the options that they have for DNO Insurance.
- [19:31]
A
Thank you. We really, we really appreciate that. And you know, right now it does help that we have a robust market with a lot of underwriters that are interested in writing IPOs. So that's, that's helpful in achieving a good outcome for you. So, but, but thank you so much for that comment. Well, thanks everyone for joining us. I mean, there's really a lot to unpack here. I mean, I think some key takeaways are that although there's a lot of noise out there regarding geopolitical uncertainty and market volatility, Paul touched on those challenges as you look to go public. One thing I would add is that despite all those things, I think either from both sides of the political aisle, there's from a public policy perspective, a desire for the US Government to have more publicly traded companies. And we're seeing that this year, and I think we should continue to see that. So there's a lot of factors that would suggest that now is a more favorable time for companies to go public in many years. That ranges from a legal liability perspective and these new interesting things to consider about potentially redomiciling to a state like Texas or maybe Nevada with respect to venue and also the fact that the insurance market is offering broader coverage and more attractive pricing than we've seen in years. So thank you both for joining me today. That's all for this edition of Risk in Context. We hope everybody enjoyed our discussion and thank you for listening. You can rate, review and subscribe to Risk in Context on Apple Podcasts or any other app you're using. You can also follow Marsh on LinkedIn or X. In addition to your podcast feed. You can find more episodes of Risk in Context and more insights from Marsh, including our recently released IPO guide on our website, marsh.com thank you.