Sam Thomas
Sam Thomas

Client Director – M&A and Transaction Solutions

Snapshot

  • Despite lockdowns in Australia and New Zealand, this year has seen high levels of deal activity across a range of sectors, with $billion plus deals returning to the market.
  • Increased usage of warranty and indemnity insurance, coupled with the increase in deal flow, has driven upward pressure on pricing.
  • Claims activity has also been increasing.
  • Increased competition and newer entrants have led to more robust coverage being offered by insurers on US style coverage and tax policies.
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2021 has certainly broken the shackles of the stunted 2020 M&A market due to impacts of the pandemic, with the return of very strong deal activity across both Australia and New Zealand. In particular, we have seen keen interest from international PE heavyweights, sovereign wealth funds and Corporates willing to pay attractive prices for resilient Australian and New Zealand businesses.

From a resourcing perspective, this has unsurprisingly led to the insurance markets being capacity constrained during this period. With the continued uptick in usage of warranty and indemnity insurance as a proven risk mitigation tool, coupled with the increase in deal flow, we have seen an upward pressure on pricing in the market.

According to insurers, claims activity has also been increasing, contributing to the noted upward pressure on pricing.

Due to increased competition and newer entrants wanting to establish their position, we have also seen more robust coverage being offered by insurers on US style coverage and tax policies.

For further insights on M&A insurance market trends and 2022 outlook, download the full report below.

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