Global R&W insurance claims rise despite M&A slowdown

The competitive landscape in 2023 favoured insured parties more.

A steady increase in claims was captured in the representations and warranties (R&W) insurance sector, despite a slowdown in the merger and acquisition (M&A) market and R&W policy placement in 2023, Aon’s Global Transaction Solutions Claims Study revealed.

In 2023, Aon clients filed over 140 new R&W claims, totalling more than 950 claims in North America. 

Of these, 39% settled within the policy’s retention, 17% resulted in insurer payment, 24% remain active, 16% are inactive, and 4% were denied.

R&W insurers have paid over $1b to Aon clients in North America through 2023, with more than $550m paid in the last three years. 

More than $300m was paid on claims filed over 12 months post-transaction close.

In EMEA, insurers have paid over $120m on W&I and tax claims, with over $20m paid since the last report.

In Australia and New Zealand, claims are notified on about one in five W&I policies placed since 2012.

The competitive landscape in 2023 favoured insured parties with reduced pricing and expanded coverage scope. Insurer performance in handling claims has become a key differentiator.

Clients increasingly seek assurance of a fair, efficient, and timely claims process. 

The study covers R&W, W&I, and tax insurance claims globally, identifying key trends and loss drivers. 

Aon managed over 150 new claims in North America and 48 in EMEA in 2023, with steady claim rates in Australia, New Zealand, and growth in Southeast Asia.

This year’s survey includes responses from 18 North American and 14 EMEA insurers, providing comprehensive insights into claims performance and trends. 

Stephen Davidson, head of claims for Transaction Solutions at Aon, emphasized the importance of collaboration among stakeholders for a smooth claims process, which often results in positive resolutions for clients.

In 2023, Aon helped clients resolve a record number of claims, securing nearly $250m in North America and nearly $50m in EMEA and APAC.