The transactional risk claims environment continued to evolve in 2024, with increases in both the number of claims and their complexity. Insurer payments to Marsh clients exceeded $300 million for the second year in a row, highlighting the growing reliance on transactional risk insurance amid ongoing economic and geopolitical uncertainties.
But has transactional risk insurance delivered its promise to protect M&A deals? Watch the video to uncover the story behind claims trends from the last decade.
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In 2024, Asia's claims activity remained relatively steady — defying the global trend
Here are the top three highlights:
Tax breaches are the leading cause of claims notifications
Over the past year, tax breaches accounted for 40% of warranty and indemnity (W&I) insurance notifications followed closely by financial statements.
Manufacturing and real estate tie for top industry with claims
Real estate and manufacturing lead the way in transactional risk claims in Asia. With real estate, this is largely driven by land use taxes and historical deductions related to relief schemes. Meanwhile, in manufacturing, claims often stem from asset discrepancies and financial misrepresentations — where actual performance fails to match what was presented.
Top source of claims by geography
India was the top source of claims notifications, accounting for 40% of notifications filed in Asia, mainly due to audits and assessments in connection with double taxation treaty exemption and qualification.
Cover your liabilities with three key insurance products:
- Tax insurance allows you to isolate tax issues among all M&A parties and transfer associated risks to an insurance provider.
- Warranty & indemnity (W&I) insurance protects you during the acquisition of new assets or businesses.
- Contingent risk insurance enables you to transfer risks around known legal and regulatory exposures to insurers.
Why Marsh?
Marsh Asia has placed insurance for 148 M&A deals in 2024 alone, capturing 70% of the market share. Our team of 16 ex-lawyers and tax experts provides industry-specific advice throughout the entire deal process from funding and acquisition to portfolio management and exit strategies.
With our specialised claims expertise, we have managed over 170 claims in the past decade. Our PEMA Claims Advocacy Services will work on your behalf during loss events, ensuring you get fair, efficient, and maximised recoveries.