3 MIN READ
Published 11/19/2024
The Liberty Global Transaction Solutions 2024 mergers and acquisitions (M&A) claims briefing delivers a comprehensive overview into key notification trends, highlighting the issues that most impact our industry from a claims perspective.
These data driven insights, based on years of claims data, empower our clients and law firms with better decision-making to help guide them forward.
Key findings
Slight decrease in notification frequency
The early indication is that notification frequency has picked up slightly on the 2021 Year of Account (YOA) after dropping back on the 2020 YOA.
Significant paid and reserved claims prove the value of policies
We have paid out and reserved roughly $315m involving R&W claims, with the majority resulting from just five breach types.
Uptick in claims severity on the 2021 YOA
We have seen an uptick in claims severity on the 2021 YOA, especially in EMEA (but anticipate that this will drop back again on the 2022 YOA and beyond).
Increase in third-party claims
While tax-related issues still make up a large proportion of notifications, we are increasingly seeing an uptick in third-party claims. As R&W policies typically cover costs associated with the defense of these claims, and these are rising steeply, insurers’ costs are increasing.
Breach of warranty notifications
49% of R&W notifications involving an alleged breach of a general warranty are received within 12 months of closing, suggesting that insureds are becoming more systematic about assessing whether they have a policy claim post-acquisition.
Emerging trends
GTS’ Americas region saw the smallest decline in R&W notification count in 2023. The Europe, Middle East and Africa region saw a notable drop in R&W notifications in 2023, while the Asia Pacific region experienced the largest fall, with the lowest number of R&W notifications in three years.
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