Warranty Indemnity Claims Half Decade Data

In recent years, the number of Warranty & Indemnity (W&I) insurance policies placed in Asia as part of M&A deals, have increased exponentially. The increasing universality of W&I Insurance in deal structuring demonstrates its value as a useful tool to insure and transfer both buyers’ and sellers’ risks in a deal.

In the inaugural edition of the Transactional Risk Insurance (Asia) Claims Study, we investigate the reasons behind the popularity of W&I Insurance by analyzing claim trends, and examine:

1. How the claims environment has changed.
2. What have caused those changes.
3. What developments the future may hold based on current trends and our observations in more established W&I Insurance markets.

Some insights we have gleaned from the data behind this report include:

• A 250% growth in the number of claims filed between 2015–2019.
• Approximately 15.46% of all policies placed in 2019 received at least one notification.
• 74% of all notifications were for deals with enterprise values of < USD 500m.
• Tax and Financial Statement breaches continue to be the most prevalent categories of breaches.
• Singapore and Japan clients place the most number of W&I insurance in Asia and, thus, lodge the most number of claims.
• 58.13% of notifications are filed by Corporate clients as opposed to Private Equity clients.
• Differences in statistics between industries, and also across geographies within Asia.