The following is a LinkedIn Article written by Jay Rittberg, Managing Principal at Euclid Transactional. 

2024 has been the busiest summer for global M&A deals in Euclid Transactional’s history.  We set monthly records in both June and July 2024, binding 112 and 169 representation and warranty/warranty and indemnity insurance (RWI) policies globally.  The 169 policies bound in July was the most for any month in our history, surpassing the 157 we bound in December 2021.  We had record submissions globally for June and July, totaling 1,679, 5% more than the prior record set in June and July 2021.  Our data indicates that M&A markets should continue to remain highly active as we finish Q3.

In addition to a rise in policy bindings and submissions, deal sizes also remained high with July average enterprise values reaching over $440 million, the second highest level of any July in Euclid Transactional’s history, second only to the record July of 2021.  This is consistent with data on the return of larger deals discussed in our prior post. These numbers continue to be in line with expectations that inflation will remain steady or drop in 2024 and financing for larger deals is available.

With increasing deal size and volume, we are finally a seeing the price of policies increase in Q3. The transactional insurance industry has now paid billions of dollars of claims (with Euclid alone having paid over $825 million in claims), but the aggregate rate on our primary RWI in North America is still near historic lows. Rate increase seems necessary given some of the trends identified in our Global RWI Claims Study released in Q4 2023, and that it will continue to require significant underwriting and claims-handling resources to properly support the high level of service that Euclid hopes to deliver to its partners in the M&A ecosystem.

How is your Q3 looking? Do our numbers align with your experiences in the M&A and RWI markets? What are your deal expectations for the remainder of 2024?  Feel free reach out to Euclid Transactional to discuss these or any other topics.