Marsh reports significant growth in global transactional risk insurance market in 2024
Marsh, the world’s leading insurance broker and risk advisor and a business of Marsh McLennan (NYSE:MMC), released its 2024 Transactional Risk Insurance Year in Review report, highlighting significant trends and developments in the transactional risk insurance market over the past year.
With global deal volume growing 8% to US$3.4 trillion in 2024, the demand for transactional risk insurance solutions surged, driven by a growing recognition of its value in mitigating risks associated with complex transactions. Marsh placed transactional risk insurance limits of US$67.8 billion across over 2,750 policies, marking a 38% increase from the prior year.
Notable activity was observed in sectors such as technology, healthcare, and renewable energy, where dealmakers used transactional risk insurance at near-record levels. The renewable energy sector, in particular, saw a significant rise in the use of tax insurance, reflecting ongoing trends in sustainability initiatives. Growth was further buoyed by increased usage of transactional risk insurance in emerging markets, particularly in Latin America and Africa, highlighting the expanding capacity of local insurers to facilitate cross-border transactions, according to the report.
Overall, the global transactional risk insurance market was generally favorable to buyers in 2024, with double-digit decreases in pricing for primary layers of coverage across all regions. Underwriting capacity remained ample globally, with approximately US$1 billion of limits typically available for single transactions in North America and Europe, though insurers began to manage limit deployment more conservatively toward the end of the year, owing to increased claims activity on larger insurance programs.
According to the report, transactional risk insurance claims increased by 20% and 30% in North America and EMEA, respectively in 2024. Asia’s claims activity remained stable compared to 2023, while the Pacific region experienced a slight decrease in claims notifications.
"Last year marked a pivotal year for transactional risk insurance, with a notable recovery in global M&A activity and an increased recognition of the value of insurance solutions in managing transaction-related risks," said Craig Schioppo, Global Head of Transactional Risk, Marsh. “While geopolitical uncertainty has adversely impacted global M&A activity through Q1 2025, we remain optimistic about the continued growth of this market and its role in facilitating successful transactions across various sectors.”
About the European market:
Last year was characterized by increased deal activity, broadened coverage, and low premium rates. Following a slowdown in M&A activity in 2023 that extended into early 2024, deal activity started showing signs of recovery in the second quarter of 2024, resulting in a significantly more active second half of the year.
Marsh’s European transactional risk team reported a 35.6% increase in the number of deals and 36.2% increase in overall limit placed during 2024 compared to 2023. The team placed around 600 policies for transactions with an aggregated underlying enterprise value of around US$97.1 billion (excluding UK transactions). Approximately 61% of the European team’s policies were placed in the second half of the year, up from around 47% during the second half of 2023.
There was a notable year-over-year increase in the midmarket to large-cap transactions with enterprise values between US$250 million and US$1 billion. Transactions with enterprise values between US$250 million to US$500 million increased by 91%. While larger deals were less frequent in the first part of 2024, compared to the pre-M&A slowdown period that commenced in 2022/2023, significant placements, including several very large deals (valued over US$5 billion), reemerged during the second half of 2024. Some placements made by Marsh’s European team were for transactions valued at over US$20 billion. This trend is reflected in the average enterprise value of placed transactions, which increased by 16% to US$293 million.
Notably, several of the largest deals involved strategic corporate divestments and mergers, highlighting growing awareness among corporates of the value of transactional risk insurance to mitigate exposures. More than half — 56.8% — of policies placed by Marsh in Europe in 2024 were placed for corporates, with the remaining policies placed for private equity firms.
Key takeaways
- Insurers demonstrated a strong appetite for innovation, introducing new and broader coverage options and expanding warranty periods, which reflects a competitive landscape where flexibility and enhanced coverage are increasingly prioritized.
- Claims notifications reached a record high in 2024, driven by the increased volume of policies issued, with a notable focus on tax and financial statement warranties, underscoring the dynamic nature of the transactional risk landscape.
- The tax insurance market in Europe experienced significant growth, with an increasing number of submissions and policies placed, highlighting its evolution as a recognized tool for mitigating tax risks in various contexts beyond M&A transactions.
- M&A volumes and deal values are expected to increase in 2025. Coupled with increasing claims notifications and larger loss payments, this may lead to premium stabilization and a gradual uptick in rates, while coverage terms remain favorable for policyholders due to vigorous competition among insurers.
The full report, attached below, provides more detailed information for the European market (and other markets).
Marsh Transactional Risk Insurance 2024-Year in Review.pdf
PDF 8.5 MB