The mergers and acquisitions (M&A) landscape in Asia-Pacific has seen a resurgence in 2024, following a slowdown in the previous year.
According to Aon’s latest Transaction Solutions Global Claims Study, both the number and value of M&A deals have increased across the region.
This uptick has been accompanied by a broader use of insurance solutions designed to manage transaction risks. These insurance products are being adopted by a range of clients, including private equity investors, strategic buyers, and entities linked to government interests.
The report attributed the increased adoption of M&A insurance to several factors. The complexity of cross-border transactions has grown, and many parties face unfamiliar regulatory requirements in local markets.
Additionally, it is becoming more common for sellers to require insurance solutions as a condition of closing, particularly in certain jurisdictions and sectors.
Although Asia’s claims frequency remains below that of more established insurance markets, the region is experiencing a steady rise in notifications. Insured parties are demonstrating greater awareness of their rights and the advantages of initiating the claims process promptly.
Data from Aon indicated that India leads the region in the proportion of claims, followed by Greater China and Korea.
The study highlighted that breaches related to material contracts are the most frequently cited under warranty and indemnity (W&I) insurance.
Tax warranties also continue to be a significant source of claims, mirroring patterns seen in North America and EMEA.
Other common notification categories include compliance with laws, litigation, disclosure obligations, and licensing issues.
Most claims are reported within the first year after a transaction closes, with the remainder typically submitted within three years.
For tax insurance policies, two-thirds of notifications occur within the first year of policy inception, with the rest reported within two to three years.
Insureds in Asia are increasingly opting to notify insurers at the earliest indication of a potential breach, even if the financial impact has not yet been fully determined.
The expansion of insurer presence in Asia has led to more resources being dedicated to local claims handling. Some insurers have established specialist teams in the region, while others rely on support from teams based in EMEA. These teams combine technical expertise in W&I and tax insurance with experience in post-M&A disputes and local language skills.
Despite these developments, challenges remain in the claims process. Gathering necessary information can be time-consuming, particularly when data is not immediately accessible from target companies.
Ongoing third-party disputes may also delay resolution. Early notifications often lack detailed quantification of losses, making it beneficial to involve experts in claim valuation early in the process.
In Australia and New Zealand (ANZ), the M&A market has shown signs of recovery in 2024, with a higher number of insurance-bound deals compared to the previous year.
Industry participants expect this momentum to continue into 2025, with sustained demand for W&I insurance.
Competition among insurers has resulted in broader coverage and the introduction of new products, such as synthetic warranties. These products are designed for situations where sellers are unable or unwilling to provide warranties, such as in distressed sales or auctions.
Insurers have also adjusted their offerings for small and medium-sized enterprises (SMEs), including lower minimum premiums for certain transactions.
Claims notifications remain a regular feature of W&I policies in ANZ, with around one in five policies resulting in a claim.
Most claims arise from transactions valued below A$500 million, highlighting a higher frequency of claims in smaller deals. Common triggers for claims include breaches related to compliance with laws, tax matters, and financial statements. Employment-related claims are also prevalent, reflecting the complexities of regulatory compliance in this area.
A recurring issue is insufficient disclosure during due diligence, which often contributes to claims.
Nearly a quarter of claims are reported within six months of closing, and almost half within the first year. The majority are filed within three years, consistent with typical W&I policy durations.
Claims notifications in ANZ declined from 2019 to 2022, likely reflecting the impact of reduced deal activity following the COVID-19 pandemic.
As the market recovers, claims frequency is expected to remain steady, supported by increased awareness and use of W&I insurance.
Recent data shows a slight increase in claims submitted within two years of deal completion, suggesting that insured parties are becoming more familiar with notification requirements.
The responsiveness of insurers to claims varies, and the quality of claims service remains a key factor in insurer selection. The complexity of claims, especially those involving loss assessment and breach determination, often requires specialized legal and accounting input, which can prolong the resolution process.
The findings from Aon’s report are consistent with WTW’s Quarterly Deal Performance Monitor, which showed that Asia-Pacific, alongside Europe, is leading global M&A activity in 2025.
Buyers in the region outperformed their index by 3.9 percentage points, with 100 deals completed in the first half of the year, up from 69 in the same period last year. The increase was driven in part by a surge in Chinese transactions.
