Skip to main content


Transactional risk report 2021: EMEA

In 2021, there was a significant increase in the use of transactional risk insurance in Europe, the Middle East, and Africa (EMEA), driven by the underlying record M&A volumes in the region.

In 2021, there was a significant increase in the use of transactional risk insurance in Europe, the Middle East, and Africa (EMEA), driven by the underlying record M&A volumes in the region. Across EMEA, Marsh placed close to 1,000 transactional risk policies for deals with an aggregated enterprise value in excess of US$277 billion and with total limits in excess of US$35.9 billion — representing a policy count growth across the region of close to 74%. W&I insurance represented the vast majority of solutions placed, however, we saw a marked increase in the number of tax and contingency solutions used, demonstrating the ongoing diversification of the transactional risk insurance market.

Notable 2021 trends

Price rises at the time of capacity constraint

As a result of the heightened demand for W&I insurance across the region, especially in the fourth quarter of 2021, insurers were more selective as to which transactions they quoted and the latter part of the year saw a material increase in pricing. The rise in demand also led to an increased inability on the part of insurers to support multiple bidders on “clean team” trees, and certain insurers refused to engage with non-exclusive bidders. We anticipate this trend diminishing through 2022, as underwriting capacity expands — although transaction timetables are expected to remain compressed in the year ahead, due to the continued competitive seller M&A market conditions.

Larger deal sizes

There was a significant increase in the average transaction size in 2021, following a decline in larger transactions during the prior year, as a result of the Covid-19 pandemic. The average deal value was US$370 million — an increase of 64% on 2020. More substantial “mega” deals — transactions with enterprise values in excess of US$10 billion — were also insured. This reflects insurers’ growing comfort with covering transactions of this scale.

Programs used multiple insurers

In 2021, insurers increasingly focused on reducing their exposure to a single transaction, with lower limits of insurance offered on each deal. As a result, programs of insurance syndicating capacity from multiple insurers were increasingly more common across EMEA, particularly on private equity, mid-market transactions, where historically insurance has been placed with one insurer. We expect this trend to continue in 2022.

Insurance used for identified risks

There was a significant increase in insurance capital being used to effectively ring-fence identified issues. This was partially due to the inability of bidders to negotiate contractual protection from sellers amid highly competitive sale processes. There was a substantial increase in the number of tax insurance placements, as well as in placements to cover other types of non-tax identified, contingent liability issues. Examples of the latter included insuring the outcome of planning permit challenges on construction projects and the availability of government subsidies.

Corporate insureds increase

Heightened insurance activity was also, to a large extent, driven by private equity players, but roughly 51% of all insureds were strategic corporate buyers, up from 47% in 2020.

Widened geographical insurer appetite

Insurer appetite continued to widen for transactions in Eastern Europe, Israel, Africa, and the Middle East, amid significant M&A activity in each of these regions. Historically, it has been challenging to find cover for transactional risk in these locations.


Across the EMEA region, and beyond, the pandemic has had a diverse impact on the claims landscape. In the UK and Ireland, there was a general slowing of claims notifications over the course of 2020, and into 2021, which was reflective of the state of the global economy and lower M&A activity levels in early 2020. However, over the same period, there was a material increase in claims notifications and claims payments in Continental Europe where notifications increased by 44.8%.

In view of the renewed M&A activity and unprecedented numbers of W&I policies placed in 2021, we anticipate a significant upturn in both notifications and payments by mid-2022, and well into 2023, across the EMEA region. Insurers, particularly those newer to the market, are expected to deal with claims more expediently and cost efficiently, which could result in a faster claims settlement process. In 2021, we saw some significant claims payments made by insurers, including several individual payments, in excess of US$20 million.

Outlook for 2022

Current activity levels across all EMEA jurisdictions are expected to continue to remain high, particularly in the next few months. New transactional risk insurance entrants are generating intense competition between insurers and an increase in overall market capacity. Consequently, the heightened premium rating environment seen in the first half of 2021 will likely not be sustained over the long term. However, we expect elevated premium levels to continue in the short- to medium-term, in light of the robust activity.

The practice of formally “stapling” an insurance package to an auction process is predicted to become more common throughout the EMEA region. This practice is often used in the UK, the Nordic countries, and the DACH region (Germany, Austria, and Switzerland), as sellers look to run expedited sale processes and maximize competitive tension between bidders, while at the same time optimizing the ultimate coverage position and reducing any execution risks.

Insurers will be more focused on exposure management, meaning many will continue to deploy lower limits for any one transaction. We also expect more insurers to develop a wider contingency liability insurance offering to solve identified issues, above and beyond identified tax issues, which are now regularly solved with stand-alone tax insurance policies.

Related insights