Asia's transactional risk claims notifications doubled in 2025 as the M&A insurance market continues to mature. What is driving the surge?
Marsh Risk’s 2026 Transactional Risk Insurance Claims Report recorded 40 transactional risk claims notifications in Asia in 2025, double the previous year’s total, with claim severity also increasing.
More than US$80 million was paid to Marsh clients across the region – setting records for both total annual payouts and the largest single claim – reflecting the growing adoption of transactional risk insurance in Asia’s M&A market.
Here are the key findings:
Financial statements overtake tax-related breaches as Asia's leading W&I claims driver, while tax liability claims surge
- Financial statement misrepresentations accounted for 41% of W&I claims notifications in 2025, compared with 21% for tax-related breaches, reflecting how more sophisticated deal teams and stronger policy understanding are enabling parties to identify covered issues and pursue recoveries more confidently.
- Tax liability insurance claims more than doubled to their highest recorded number since 2017, driven by heightened scrutiny from tax authorities and increased adoption of the solution.
Over half of financial statement claims are expected to exceed retention thresholds, highlighting the value of W&I insurance in recovering losses
- 54% of financial statements-related claims are expected to exceed retention, with 27% alleging losses greater than US$5 million.
- The pattern is driven by declines in the value of purchased shares resulting from flawed underlying valuation models based on inaccurate financial information.
- Tax liability claims are also expected to rise in frequency and severity as tax authorities increase scrutiny amid challenging macroeconomic conditions.
Most W&I claims surface within the first two years of policy inception, with 60% of claims filed within that period
- More than 60% of all claims filings on policies issued in 2023 and 2024 were reported in 2025, reflecting sustained claims activity within a policy's first two years.
- Even so, the largest single share of claims (27%) was reported after the 24-month mark — a 12% increase on 2024 — showing W&I insurance also continues to protect against risks well beyond the integration period.
Japan and India drive 73% of Asia's transactional risk insurance claims
- Japanese organisations accounted for 40% of Asia’s claims in 2025, with 13% arising from domestic Japanese W&I policies.
- India followed at 33%, with notifications rising 30% year-on-year and standalone tax liability insurance claims up 40%.
- Manufacturing remains the top industry, with 48% of claims.
Competition is speeding up insurer responses, with 92% of claims receiving coverage guidance within 30 days
- Some insurers issued preliminary coverage comments within three calendar days of notification in 2025, down from an average of 10–12 calendar days in 2024.
- That 30-calendar-day turnaround for substantive coverage guidance beats the 30-business-day standard set by typical policy timeframes — underscoring how much faster claims handling has become.
How Marsh helped recover a US$75 million tax claim — the largest transactional risk claim payout on record in Asia Pacific
The challenge: Following an acquisition in Southeast Asia, the insured faced a tax payment demand of more than US$75 million under a tax insurance policy. Several years after the deal had closed, tax authorities audited the transaction and assessed acquisition-related tax liabilities, leaving the buyer exposed to a significant and unexpected cost.
How Marsh helped: Marsh Risk Asia’s PEMA Services team coordinated stakeholders, reconciled discrepancies across submissions and supporting documentation, and kept the claims review focused and transparent. This helped address coverage issues that might otherwise have delayed recovery or reduce the final payout.
The outcome: The buyer secured a full recovery of the advance tax payment – the largest single transactional risk claim payout on record in Asia Pacific.
Cover your liabilities with three key insurance products:
- Warranty & indemnity (W&I) insurance protects you during the acquisition of new assets or businesses.
- Tax insurance allows you to isolate tax issues among all M&A parties and transfer associated risks to an insurance provider.
- Contingent liability insurance enables you to transfer risks around known legal and regulatory exposures to insurers.
Why Marsh?
In 2025, clients of Marsh Risk’s PEMA Services received more than US$80 million in policy proceeds, including a US$76 million tax liability claim, the largest single payment on record in Asia Pacific. Backed by more than a decade of experience and over 1,000 deals placed, the PEMA Services team combines regional market leadership with deep legal and tax expertise to help private equity firms and corporates manage M&A risks across the investment lifecycle.
