Global Risk In Review 2020

22 July 2020

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Mergermarket is pleased to present our quarterly Risk in Review 2020 report, published in association with Aon’s Transaction Solutions team.

For this report, Aon commissioned Mergermarket to interview global M&A insurers and managing general underwriters to learn their views about the risks and challenges in the year ahead. The coverage includes exclusive data exploring regional, deal size and sectoral variations as well as insights on claims, a potential hardening market and premiums, positions and policies.

Key findings include:

  • Survey respondents noted M&A insurance (R&W, Tax and Contingent/Litigation) was placed for 4,229 deals globally in 2019, representing continued annual growth in dealmakers’ utilization of insurance as a key strategic tool.
  • Outside of North America, which realized the greatest increase in policies underwritten in 2019, 11% of survey respondents saw the most growth in Asia, with the same share selecting Europe as their fastest growing market. More than a quarter (26%) also picked Europe as the market most likely to grow the fastest in 2020.
  • Despite COVID-19’s impact on deal flow in the first half of 2020, respondents remain optimistic regarding the value of M&A insurance to manage risk in the face of economic uncertainty, particularly distressed transactions, and look forward to insurance being a key factor as deal volume begins to rebound.
  • Most respondents (83%) received claims that impacted their deal selection and underwriting approach. Restriction of deal selection was chosen by 47% as the most important consequence following a received claim.
  • 84% of respondents expect to see the most growth in policy issuance in the lower mid-market (deals valued between US$5 million and US$99 million) and the upper mid-market (deals valued between US$100 million and US$999 million).