Mergers and acquisitions (M&A) insurance claims reached record levels in 2024, with the highest total payouts ever recorded, according to Aon’s report.
The report identified a sharp rise in claims related to Representations and Warranties (R&W) insurance, also known as Warranty and Indemnity (W&I) insurance.
Aon’s data shows that its North America claims team supported more than 100 paid claims for clients over the past three years.
In 2024, Aon’s North American clients recovered $300 mn in paid claims, with a median payout of $5.5 mn.
The main causes of R&W claims were alleged breaches of warranties related to compliance with laws (20%), tax (17%), and material contracts (13%).
In the Europe, Middle East, and Africa (EMEA) region, Aon reported a 26% increase in claims notifications in 2024. This growth brought EMEA’s total share to more than 35% of all paid claims for Aon clients in the region to date.
Breaches of tax warranties accounted for 26% of claim notifications, while the most significant payouts stemmed from breaches concerning financial statements (27%), compliance with laws (13.2%), and material contracts (11%).
In the Asia Pacific (APAC) region, new trends have emerged, including a broader range of breach categories in claims.
This includes more regulatory, litigation-related, and disclosure-related claims, particularly in Asia. In Australia and New Zealand (ANZ), disclosure-related breaches represented nearly 30% of all W&I claims. Smaller transactions in ANZ also continued to show relatively high claim frequency.
India-based risks made up over 30% of all Asia claims tied to W&I and tax liability policies in 2024. The claims were driven by both cross-border treaty disputes and domestic Indian tax matters.
In APAC, the top categories driving W&I claims were breaches involving material contracts (19%) and breaches related to legal compliance, tax, and licensing permits, each accounting for 12.5% of claims.
