Our outlook on the industry

The Impact of Covid-19 on R&W/W&I – Euclid Transactional October 2020 Update

Continuing with our monthly updates on how Covid-19 is changing the landscape for M&A, below are Euclid Transactional’s stats through September on global R&W/W&I insurance submissions and policies bound for 2020. Consistent with articles like this one in the Financial Times describing the summer of 2020 as “the busiest summer for M&A on record”, we had record September submissions and bound policies numbers. September was the first month since February 2020 and the start of the Covid-19 crisis that submissions and bound policies were above 2019 levels, up over 25% and 39%, respectively, vs. August 2020. We saw continued higher average deal sizes compared to April through June and were pleased to bind more than 5 times the number of policies bound in April when Covid-19 prevented many deals from signing. With increasing volume, September saw the average cost of our US primary policies rise by over 20% compared to the lowest monthly average pricing of 2019. We attribute this increase in rate to clients and brokers recognizing that Euclid and other established markets have paid hundreds of millions of dollars of claims over the last 12 months, and valuing insurers that have a proven track record for fairly and efficiently paying claims.

Do these numbers line up with what you are seeing in the deal world and the quotes you are receiving for R&W insurance? Do you expect this sharp increase in deal flow to continue through the election in November and beyond? Feel free to reach out to Euclid Transactional to discuss this data or anything else.

 

Euclid Transactional Global R&W/W&I 2020 vs. 2019
Euclid Transactional Global R&W/W&I 2020 vs. 2019

 

Euclid Transactional Global R&W/W&I 2020 vs. 2019
Euclid Transactional Global R&W/W&I 2020 vs. 2019

 

Euclid Transactional Global R&W/W&I Recent Weekly Submissions and Average Enterprise Values
Euclid Transactional Global R&W/W&I Recent Weekly Submissions and Average Enterprise Values