About one in seven M&A deals results in a claim: AIG

By Josh Bradford on February 29, 2016

AIG-R-new-200x200-no-greyNearly 14 percent of AIG’s global M&A policies have resulted in a claim. This according to a study by the insurer of its own global representations and warranties (R&W) claims data between 2011 and 2014.

“More and more, M&A insurance is becoming part of the transaction process worldwide,” said Mary Duffy, global head of M&A insurance at AIG. “Companies see it as a better alternative to closing a deal than contentious negotiations to allocate potential risks and unknowns.”

Representation and warranties insurance policies can be purchased by either the buyer or seller in a transaction.

Buyers use the insurance to protect against breaches of representations and warranties made by a seller during the deal process. Sellers purchase the insurance to protect against buyers claiming they breached a representation or warranty made at the time of closing.

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Josh is an Editor at Advisen in the Research & Editorial division. He is the lead editor responsible for several of Advisen’s Front Page News editions and he also originates custom research on behalf of Advisen’s largest insurance company clients. Contact Josh at [email protected].