Global M&A rebounds, APAC outshines peers

WTW said this trend was mainly seen in the W&I insurance market.

In 2023, global M&A activity experienced a significant downturn initially but showed resilience in the latter half of the year, but the Asia Pacific (APAC) region stood out for its robust activity.

Despite a drop in acquisitions compared to 2022, APAC acquirers closed 72 deals in H1 2023. Notably, APAC acquirers consistently achieved positive share price performance over nine consecutive quarters, outperforming their counterparts in North America and Europe.

This trend was reflected in the Warranty and Indemnity (W&I) insurance market, where insurer terms became more competitive, boosting the appeal of transactional risk insurance, WTW’s Global Transactional Risk Review and 2024 Outlook showed.

The competitive landscape in the W&I market persisted as insurers aimed to gain or retain market share. 

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Emerging markets and non-traditional transaction structures witnessed a surge in W&I insurance usage, while geopolitical concerns led insurers to focus on regional risk variations, impacting coverage and pricing.

Driven by decreased deal flow, W&I insurance pricing hit historically low levels in 2023. Coverage terms expanded, with insurers more willing to negotiate on previous exclusions, aligning with a broader risk acceptance strategy.

Looking ahead to 2024, the market anticipates a continuation of cautious optimism seen in the latter part of 2023. With ample liquidity, investors and corporates are expected to pursue quality transactions, sustaining the robustness of the W&I market. Continued innovation in underwriting practices is expected to address evolving market demands, including insuring hybrid risks.