Surging loss payments and more valuation-driven claims are putting fresh pressure on the global representations and warranties insurance (RWI) market, Euclid Transactional warns in a new claims study.
In its third annual Global RWI/W&I Claims Study, Euclid confirmed that carriers backing its program have now paid more than $1 billion in RWI and warranty & indemnity (W&I) claims. More than $314 million of that total related to just 44 payments in the most recent year covered, underscoring a sharp uptick in large, complex losses.
Behind the topline numbers are trends with direct implications for underwriters and brokers. From July 1, 2024, to June 30, 2025, Euclid reported that more than 45% of total loss paid arose from individual claim payments of $20 million or more, and that diminution-in-value cases have doubled since 2022, as buyers pursue enterprise-value losses when deals sour.
Broader market data point the same way. Aon’s 2025 Global Transaction Solutions Claims Study showed North American clients recovered over $1.4 billion in R&W claims through Q4 2024, with more than $300 million paid in 2024 alone and a record median payment of $5.5 million. Compliance with laws, financial statements and material contracts were the top breach drivers in North America, while tax warranties led in EMEA, underscoring that claim activity was not confined to any single sector.
Despite the increase in severity, most RWI disputes are still being resolved commercially. Aon’s insurer survey data indicated that only about 1% of R&W claims are going to arbitration or litigation, with the overwhelming majority settled through negotiation, highlighting the importance of experienced claims teams and well‑documented diligence for insureds.
The UK sits at the heart of this EMEA trend. Aon’s EMEA claims study showed notifications across the region rose by 26% in 2024 compared with 2023, with more than €60 million recovered for clients last year alone and over €170 million paid in total to date; 2024 settlements accounted for more than a third of all W&I payouts Aon has secured in EMEA so far.
Meanwhile, Marsh’s latest transactional risk review highlighted that primary W&I pricing in the UK fell by around 14% in 2024, in line with North America and Latin America, even as median UK deal sizes climbed to about $107 million and claims activity across EMEA rose materially.
For UK underwriters, that combination of soft rating, larger deal values and rising frequency is sharpening scrutiny on sectors such as manufacturing, financial services and infrastructure, which Aon identified as having the highest incidence of W&I claims in Europe.
Euclid’s own market updates are candid that while “aggregate premium rates have been rising, they remain well below the levels most industry experts consider profitable and sustainable,” even as it paid more than $300 million in claims in 2024 and crossed the $1 billion threshold in under nine years.
That gap between loss experience and rate adequacy is likely to keep underwriters focused on tighter risk selection, higher retentions and more disciplined limits on larger deals, particularly in jurisdictions and industries where DIV and large-loss claims are clustering, Euclid said.
For brokers, the claims data sharpens the playbook. Robust financial and legal diligence, careful scoping of known issues, realistic expectations around coverage for valuation-driven losses, and early, well‑documented notifications are increasingly critical to securing capacity and achieving timely recoveries. The fact that a growing share of claims is being paid at 40% or more of policy limits has also reignited debate over whether buyers should routinely purchase more than 10% of enterprise value in RWI limits on higher‑risk deals.
