Overview of the 2024 Transactional Risk Insurance Market
Marsh, a leading insurance broker and risk advisor under the Marsh McLennan umbrella, has unveiled its comprehensive 2024 Transactional Risk Insurance Year in Review report. This publication sheds light on pivotal trends and shifts within the transactional risk insurance sector over the past year.
Significant Growth and Market Dynamics
The year 2024 marked a period of substantial growth for transactional risk insurance, registering one of the most active periods on record. Marsh successfully facilitated a staggering US$67.8 billion in insurance limits, reflecting an impressive 38% increase compared to the previous year.
This remarkable expansion was propelled by a 33% surge in the number of policies issued and a 31% increase in unique transactions, underscoring the escalating reliance on insurance to navigate risks in intricate deals. Favorable conditions persisted for buyers, with pricing for primary layers of Representations and Warranties (R&W) and Warranty and Indemnity (W&I) insurance experiencing a decline across all regions.
Sectoral Contributions and Regional Trends
The technology, healthcare, and renewable energy sectors were instrumental in driving this growth, with transactional risk insurance becoming a preferred risk management tool. Notably, the renewable energy sector observed a significant rise in tax insurance usage as businesses sought coverage for investment and production tax credits, aligning with ongoing sustainability objectives.
Emerging markets, especially in Latin America and Africa, witnessed increased adoption, with insurers bolstering their capacity to support cross-border transactions.
Market Conditions and Claims Activity
In 2024, market conditions generally favored buyers, with primary coverage pricing showing double-digit decreases across all regions. Underwriting capacity remained robust globally, with individual transactions in North America and Europe typically securing up to US$1 billion in coverage.
However, insurers exhibited caution in limit deployment towards the year’s end due to an uptick in claims within larger insurance programs. The report noted a rise in claims, with North America and EMEA experiencing increases of 20% and 30% respectively. In contrast, claim activities in Asia held steady compared to 2023, while the Pacific region saw a slight decrease in claim notifications.
Future Outlook
Craig Schioppo, Global Head of Transactional Risk at Marsh, remarked, “The past year was pivotal for transactional risk insurance, marked by a significant recovery in global M&A activity and a heightened recognition of the value of insurance solutions in managing transaction-related risks.” While geopolitical uncertainties have dampened global M&A activity through the first quarter of 2025, there remains optimism about the sustained growth of this market and its crucial role in facilitating successful transactions across diverse sectors.
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