The use of insurance to mitigate risk in M&A and PE transactions is on the increase, according to a long feature article in Financier.com. The use of M&A insurance has expanded “exponentially” over the past 10 years, says the report.
It is estimated that more than USD 5 billion of policy limits for 2012 will be placed. The increase in this kind of insurance follows a desire to minimize risk, as well as an improvement in the quality of coverage provided; increased knowledge that the products exist and have performed as advertised.
Decreasing cost combined with the increase in the speed of execution has also fired the market, as well as the reliability and ease of the underwriting process, which is not invasive or time consuming, says the industry expert quoted in the article.