On the heels of a global contraction in mergers and acquisitions (M&A) activity in 2022, the byword going into 2023 was “caution.” Rising inflation, geopolitical uncertainty, challenging lending markets and the fear of a potential recession continued to put a damper on dealmaking as the volume and value of transactions declined and M&A activity fell to its lowest level in 10 years. Adding to an already challenging deal environment, buyers and sellers continued to disagree on valuations, which further hampered the volume and pace of deal activity.
However, investors remained active in 2023 and utilized unique deal structures apart from traditional buyouts, including minority investments and secondaries transactions, in order to continue to drive value. WTW also saw a slight uptick in Q4 deal activity, a hopeful sign for a more active 2024.
The challenges in this deal environment also created opportunities for buyers in the transactional insurance market. Carriers responded to slower deal flow by providing increasingly competitive coverage terms on representations and warranties insurance (RWI) and more heavily investing in growth areas such as tax and contingent risk insurance. As a result, WTW secured extremely favorable pricing and coverage for its clients on RWI, and also saw a meaningful increase in activity across both tax and contingent risk insurance. Contingent risk remains the fastest-growing area of transactional insurance as the product has evolved to cover a broader spectrum of risks. Similarly, the pipeline of tax insurance opportunities has remained strong and was particularly bolstered by placements in the renewable energy sector.
This year in review addresses 2023 market trends in transactional insurance, including RWI, tax insurance and contingent risk insurance. Please fill out the form on the right to download the 2023 year in review.
Willis Towers Watson hopes you found the general information provided in this publication informative and helpful. The information contained herein is not intended to constitute legal or other professional advice and should not be relied upon in lieu of consultation with your own legal advisors. In the event you would like more information regarding your insurance coverage, please do not hesitate to reach out to us. In North America, WTW offers insurance products through licensed entities, including WTW Northeast, Inc. (in the United States) and Willis Canada Inc. (in Canada).
