Transaction insurance market resilient despite deal drop off

Uptake of M&A insurance across EMEA has risen over the last 18 months, despite a fall in overall deal activity in the region. This is according to a joint report from Aon and Mergermarket which highlights a fall in deal value in EMEA of almost a quarter over the first six months of 2019, from £521bn in H1 2018 to £403bn in H1 2019.

Despite the drop in M&A and the difficult deal backdrop, demand from Aon’s clients in EMEA for deal-related M&A solutions – particularly, W&I, tax and contingent risk insurance – has remained resilient.

Both the volume of M&A on related deals in which Aon has been involved, and the aggregate amount of M&A insurance placed in relation thereto by Aon, have remained constant. In H1 2019 there were 165 insured deals with £6.9bn limits, consistent with the 166 deals with limits of £7bn in H1 2018.

“Aon has seen an evolution and maturation of the M&A insurance and other transaction liability insurance market”, said CEO of Aon’s M&A and Transaction Solutions team for EMEA, Alistair Lester. “Private equity firms and corporations in EMEA have become increasingly comfortable with deploying insurance capital to manage deal risk and complex tax, litigation and other unique business risks as part of capital management strategies.”

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