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Research and Briefings

Latest Trends on Transactional Risk in Australia and around the World

 


Marsh’s Transactional Risk teams around the World, including our local teams based in Australia and New Zealand, continued to drive results for clients in 2018. As merger and acquisition (M&A) activity levels climbed to their highest point in several years, Marsh’s Transactional Risk Practice has exceeded the pace of overall M&A growth. This indicates that warranties and indemnities (W&I) insurance is becoming integral to successful deals and common place in the Pacific and around the World.

Drawing on our proprietary deal data, we examine such global trends in our latest Transactional Risk Insurance Report as well as take a closer look at the Pacific market as the region experiences significant increase in deal values and market capacity.

Some of the trends and innovations seen in the Pacific during 2018 included:

  • Significant increase in limits placed, reflecting a strong growth in deal count and an increase in the number of billion-plus dollar deals using transactional risk insurance.
  • Increases in average enterprise value, reflecting the number of large deals that occurred in 2018 compared with the previous year.
  • Insurers have an increasing appetite for public-to-private transactions.
  • Available capacity continued to expand for both W&I insurance and tax insurance in the Pacific region.
  • Tax-specific policies still experience limited adoption in the Pacific region.

The upshot of the 2018 results in the Pacific is that W&I insurance is a feature of the lion’s share of deal activity each year in Australia and New Zealand. Our Private Equity and M&A team is confident that the solution is now flexible enough to add real value to a number of different types of transactions.

Looking globally, the Transactional Risk Report also highlights pricing reductions and larger transactions in America, an increase in policy adoption in Europe, Middle East and African markets as well as notable growth in Asia.

What are the key drivers fuelling this growth in the Pacific and around the World?

Download the Transactional Risk Report to find out.