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Transactional Risk Insurance Global and Asia Claims Report 2023

This report focuses on claims made against representations and warranties (R&W) policies — also known as warranty and indemnity (W&I) policies — reported and paid in 2022.
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30/08/2023

The increased adoption of transactional risk insurance in Asia as a tool to offload risk in mergers and acquisitions (M&A) has led to a corresponding rise in claims.

Asia saw continued growth in 2022 with the entry of various new insurers into the regional market and a general expansion of insurer appetite for Asia transactions and related risks. We welcome the domestic expansion and foresee that a key differentiator for carriers, from a placement perspective, will lie in their ability to pay claims, and to do so seamlessly and expeditiously.

In 2022, we continued to see a correlation between a steady deal count and notifications received on policies placed in Asia. We also saw record-breaking claim payments across the region, including several domestic claim payments by local W&I insurers.

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Global highlights

  • In 2022, claim notifications increased 25% over 2021.
  • The average time to notification increased across all regions.
  • The percentage of financial statements claims decreased significantly, while the percentage of claims related to tax, compliance with laws, and litigation increased.
  • Marsh insureds received over US$232 million in claim payments in 2022.
  • The bulk of amounts paid in 2022 came from financial statements breaches notified in previous years.

Asia Pacific highlights

  • Number of notifications: 24 notifications were filed in the region in 2022, almost the same number as in 2021. However, notifications increased by 30% from 2019, compared to a 7% growth in global notifications, which reflects the growth of the market in the region.
  • Deals with claims: 9% of deals finalised in 2022 received a claims notification during the year. Overall, the rate of claims has decreased over the last two years, mirroring reported statistics across the globe.
  • Types of claims: 
    • Claims were predominantly related to tax and financial statements warranties, but litigation warranties became the leading category of breach in 2022, accounted for 64% of all claims notified.
    • 23% of all notifications filed in 2022 related to a tax warranty breach, in line with global data that shows 25% of all notifications made during the year were in relation to a tax breach.
  • Timing of notifications: Majority of clients in the region filed claims notifications after the second year of their policy’s inception. This differs from previous findings where the majority of notifications were filed within the first year to 18 months.

Marsh Asia PEMA Claims Solutions: A US$11.3m claims payment success story in Japan

Download the Transactional Risk Insurance Global and Asia Claims Report 2023

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