August 11, 2021
R&W Insurance: Coverage for Non-Standard Deals? Good Luck!
According to a recent CFO Dive article, the high volume of M&A activity has made it increasingly difficult for deals that don’t fit easily within carriers’ comfort zones to find RWI coverage. Here’s an excerpt:
CFOs whose companies are considering an acquisition could struggle to get representations and warranties insurance unless the deal falls neatly into carriers’ comfort zones, insurance specialists said in a Dechert LLP webcast.
Since the end of last year, mergers and acquisitions have been exploding, creating a bandwidth problem at insurance carriers as they try to keep up. As a result, insurers aren’t hesitating to turn down deals.
“Carriers across the board right now are inundated with deals and requests to quote deals and as a result they can be, and are being, highly particular with the deals they choose to actually underwrite,” said Emily Standen, senior vice president of insurance broker Marsh JLT Specialty.
The article says that small deals, complex deals, deals with tight timetables and those involving unfavored industry sectors are facing challenges in finding coverage. What’s more, if you do find coverage, you’re likely to find that premiums are higher & coverage terms tighter than they’ve been in the past.
– John Jenkins