LONDON, May 9, 2024 – According to the Global Transactional Risks Review and Outlook from WTW (NASDAQ: WTW), a leading global advisory, broking, and solutions company, “adaptation” might best describe last year’s global M&A insurance market, with participants facing volatile macroeconomic conditions and prudent capital deployment. The cautious approach to M&A activity is set to continue in 2024.
The report highlights several factors contributing to the decline in M&A activity. Rising interest rates, geopolitical tensions and ongoing supply chain disruptions have created a challenging environment for deal-making. Additionally, the gap between buyer and seller expectations, particularly in terms of valuation, has further hindered deal completion.
Looking ahead, while run-away inflation has been tempered in most of the world’s larger economies, the consequent deployment of hawkish monetary policy and its effect on leverage opportunities has remained a stifle on deal activity. The impact of macro-economic factors and geopolitical unpredictability continue to have a chilling effect on overall activity, making a cautious increase in deal making activity the likely prospect through 2024.
Jeremy Wall, Global Head of FINEX, said: “For transactional risk insurance markets this has meant that provided they suffer no exposure to perceived problem jurisdictions or industries, insureds retain an excellent position with both pricing and risk appetite settling well off of historic averages in the favour of policyholders.”
“The report suggests that in 2024 a tentative approach will continue as buyers, both private equity and corporate, with considerable cash reserves will keep a keen eye on value and adjust expectations of a sudden return to a bull market or the distress jamboree which some market commentators had been predicting last year.”
“Data plays an essential role in the effective use of risk transfer solutions.”
Alex Keville | Head of M&A and Private Equity, Global FINEX at WTW
Alex Keville, Head of M&A and Private Equity, Global FINEX, added: “Data plays an essential role in the effective use of risk transfer solutions. WTW remains at the forefront in leveraging connected global insights and analytics to stay ahead of market trends. As a trusted global adviser, we emphasise the importance of consulting our experts, as early as possible in the deal cycle, to help navigate the complexities of M&A transactions ensuring informed decision-making and the enhanced ability to identify and mitigate risks using products such as transactional risk insurance.”
The complete report can be downloaded here.
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