Transactional insurance hits $49b in ‘challenging year’ – Marsh

Marsh said that it experienced its third-busiest year on record.

In 2023, despite a decline in global mergers and acquisitions (M&A) activity due to macroeconomic and geopolitical challenges, transactional risk insurance continued to play a significant role.

Marsh's Transactional risk insurance 2023: year in review highlights that Marsh experienced its third busiest year on record, placing transactional risk insurance limits of $49b on more than 2,000 policies across almost 1,200 unique transactions.

Despite fewer M&A transactions globally, abundant insurance capacity led to a "soft market" cycle, with significant pricing decreases in primary layer representations and warranties (R&W) and warranty & indemnity (W&I) insurance across all regions.

Median transaction sizes decreased in North America, EMEA, and Asia, whilst the Pacific saw an increase. Marsh closed a majority of transactions on behalf of corporate/strategic insureds, reflecting challenging market conditions for private equity firms.

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Underwriting capacity remained ample globally, with over $1b typically available for single transactions in North America and Europe.

Transactional risk insurance claims increased notably in North America and EMEA, whilst Asia saw consistent activity and the Pacific experienced a slight decrease. Marsh clients notably increased their use of tax insurance, driven by a better understanding of the product and expanded appetite among tax insurance underwriters.

Looking ahead, Marsh anticipates further developments in the transactional risk insurance market in 2024 and beyond.