Marsh's transactional risk practice achieved a record year in 2025, placing US$91.6 billion in transactional risk insurance limits globally, a 34% increase from 2024. The firm brokered more than 3,800 policies across nearly 1,800 unique transactions, covering deals with an aggregate enterprise value exceeding US$550 billion.
Transactional risk insurance, including representations and warranties (R&W), tax indemnity, and contingent liability coverage, has become a mainstream tool in M&A, providing buyers and sellers with protection against post-closing disputes. Experts said the product’s growing adoption reflects both stronger deal activity and broader recognition of insurance as a deal-enabling instrument.
Marsh reported growth across all major metrics.
The number of policies rose 37%, while unique transactions increased 15%, coinciding with global M&A deal values approaching $5 trillion. Larger, more complex transactions drove demand for higher insurance limits, prompting insurers to expand capabilities and embed legal, tax, and investment specialists into underwriting teams.
After several years of declining rates, premiums increased in most regions. North America saw primary layer R&W rates climb 16% year-over-year, surpassing 3.3% of policy limits by Q4.
Meanwhile, Europe reported moderate gains, Asia posted an 8% increase, and rates in the UK and Pacific regions remained largely flat. Insurers attributed the shift to stronger deal flow, rising claims severity, and recalibration after years of soft market conditions.
Corporate and strategic buyers accounted for 54% of placements, surpassing private equity for the third consecutive year. Market observers noted that corporates increasingly use insurance to enhance bid certainty, address counterparty concerns, and streamline post-closing adjustments, highlighting insurance’s growing strategic role in negotiations.
Average insured deal sizes rose across most regions. North America reported a 20% increase to $412 million, the UK rose 42% to $553 million, and Asia recorded an 18% gain to $329 million. Median deal sizes also increased in the Pacific and Middle East and Africa, reflecting wider adoption in mid-market deals. Larger deals have prompted more intensive underwriting due to complex exposures, including tax, regulatory, and contingent liabilities.
Claims frequency and severity rose globally in 2025. The UK reported historic notification and payout levels, Europe saw claim counts double, and Asia experienced sharp increases in notifications and payments.
On the other hand, North America saw slightly fewer notifications, but total loss payments reached record highs. Rising claims have prompted insurers to refine coverage terms and emphasize early claims engagement.
Tax insurance adoption also surged. In North America, policies increased 82% year-over-year, while Europe saw counts rise over 50% and insured limits more than double. Insurers said adoption reflects growing awareness of tax risk coverage and its role in securing complex cross-border deals.
Looking ahead, experts said the market is entering a phase of disciplined underwriting.
Transactional risk insurance remains an integral part of M&A planning, but pricing shifts, capacity constraints, and geopolitical uncertainty could influence demand in 2026. Carriers and brokers with strong analytical capabilities, cross-border expertise, and risk management support are expected to maintain an advantage.
