Insurers Adapt to Rising Claims in Transactional Risk Insurance
According to Marsh’s latest Transactional Risk Insurance Year in Review report, increased claims activity is leading insurers to refine their underwriting strategies. This comes as the demand for transactional risk insurance has risen, mirroring the growth in global deal volume during 2024.
As mergers and acquisitions (M&A) activity climbed by 8% to $3.4 trillion, Marsh facilitated the placement of $67.8 billion in transactional risk insurance limits across more than 2,750 policies – a 38% surge compared to the previous year. This increase underscores the growing reliance on insurance to mitigate financial and legal risks tied to complex transactions.
Claims on the Rise: Underwriting Adjustments
The report highlighted a significant increase in claims, with North America and the EMEA region experiencing rises of 20% and 30%, respectively. While claims in Asia remained stable, the Pacific region saw a slight decrease.
Despite a competitive market that prompted double-digit price drops for primary coverage layers, insurers started tightening underwriting practices towards the year’s end. Although single-transaction coverage limits of up to $1 billion remained available in North America and Europe, insurance providers moved to deploy their capacity more cautiously in response to the increased claims frequency.
Transactional risk insurance saw high uptake across the technology, healthcare, and renewable energy sectors, where dealmakers increasingly sought coverage for tax-related exposures.
Emerging markets, particularly in Latin America and Africa, also reported increased usage, demonstrating a growing insurance infrastructure supporting cross-border deals.
The Outlook for 2025
Craig Schioppo, Marsh’s Global Head of Transactional Risk, noted that 2024 was a “pivotal year” for the market, with M&A activity rebounding and insurance playing an expanded role in managing transaction risks.
While geopolitical uncertainty has slowed dealmaking in early 2025, Marsh anticipates continued demand for transactional risk insurance as buyers seek protection amid an increasingly complex and volatile environment.
