Transactional risk insurance placement increases 51% for Marsh
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A total of $7.72 billion in insured limits was placed in the transactional risk insurance market in 2014 by Marsh L.L.C. clients, which was a 51% increase over 2013's total, the broker said in a report.
Transactional risk insurance is predominantly warranty and indemnity, or representations and warranties, but also includes tax and contingent liability insurance, according to Marsh.
The total more than doubled in the United States and Canada, to $2.73 billion, said Marsh's report, released Monday. The insurance is also now available in Latin America, and there is wider use in Asia, Marsh said. Marsh was a broker on the first locally-issued policies in Malaysia, Mexico, the Philippines and Saudi Arabia during 2014.
Financial sponsors such as private equity firms remained the most frequent users of transactional risk insurance, according to Marsh.
Karen Beldy Torborg, New York-based global leader of Marsh's Private Equity and M&A Services Practice, said in a statement Monday, “2014 was a landmark year for the use of this insurance solution. Record demand in mature M&A markets, which is testament to the efficacy of transactional risk insurance, combined with continued increasing usage in emerging markets, helped drive these historic results. We expect to see similar demand for transactional risk insurance in 2015.”
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