We are pleased to present Euclid Transactional’s fourth annual Global Representations & Warranties / Warranty & Indemnity Insurance Claims Study, which analyzes a decade of global claims data and offers insights into a rapidly changing transactional liability claims landscape.
View/download the North America version of the study here.
View/download the EMEA version of the study here.
Over the past decade, we have seen periods of tremendous growth and disruption in the world of M&A triggered by changes in interest rates, new technologies and macroeconomic trends. We have also seen a continued adoption and acceptance of transactional liability (TL) products as standard tools used in transactions. What was once a product used predominantly by private equity sponsors only in certain jurisdictions has been adopted almost as ubiquitously by strategic acquirers and in many more locations. The spread of the product led to an increase in underwriters offering TL products.
Today, the TL industry itself is in a period of dislocation. After years of a “soft market” where carriers generally did not receive enough premium to pay their own costs and claims profitably, several insurers have exited. Although competition remains robust, the remaining carriers must use the data they have gleaned from this challenging period to make better decisions about what rates to charge and what terms to offer in order to make the product sustainable long term.
In the next decade, we suspect that there will likely be fewer TL underwriters as capital flows to the companies that have the scale, data and expertise to provide the premium service that clients expect while delivering stable and profitable long-term results. Pricing should fluctuate less with M&A cycles and be increasingly tied to the rates required to deliver those results.
One point of consistency from the last ten years that will continue is Euclid Transactional has been and will remain dedicated to delivering fast and fair outcomes in both underwriting and claims. We will always be available to work through the thorniest of issues. We welcome the opportunity to discuss the data in this report and the broader issues they raise.
We are extremely grateful for the efforts of our team, who have put in ten years of tireless work to generate the policies and claims payments that underlie this report. Thanks also to our broker, carrier, client and other partners who have supported us loyally.
