Deal Insurance Gets Pricier After Years of Decline: Marsh

Why It Matters

Higher insurance costs reshape deal economics and signal a hardening market, prompting buyers and sellers to reassess risk‑allocation strategies.

Key Takeaways

• North America R&W premiums up 16% in 2025
• Global M&A volume reached $5 trillion, fueling insurance demand
• Marsh placed $91.6 billion in risk limits, +34% YoY
• 34% of disputes involve indemnity or R&W insurance
• Mega‑deal count (> $10 B) rose 81% YoY

Pulse Analysis

The resurgence of merger‑and‑acquisition activity in 2025 has fundamentally altered the landscape for transactional risk insurance. Deal values surged to almost $5 trillion, driven by an unprecedented number of mega‑deals—transactions exceeding $10 billion grew 81% year‑over‑year. Larger, more intricate structures expose parties to greater post‑closing uncertainties, prompting a renewed appetite for representations and warranties coverage. Insurers, responding to this heightened exposure, have lifted premiums across most regions, ending a multi‑year post‑pandemic decline.

Insurance brokers like Marsh report that premium hikes are primarily a reaction to rising claim frequencies rather than a deliberate market hardening. In North America, average R&W premiums jumped 16%, while Asia and Europe saw increases of 8% and 5% respectively. The U.K. and Pacific markets remained relatively flat, reflecting regional underwriting cycles. Marsh’s placement of $91.6 billion in transactional risk limits—up 34% from the prior year—underscores the growing reliance on insurance to mitigate the financial fallout of complex deals. This trend mirrors broader risk‑management shifts, where corporations and private‑equity firms embed insurance into deal structures to safeguard against unforeseen liabilities.

For dealmakers, the evolving pricing environment necessitates a more strategic approach to risk allocation. Higher insurance costs will be baked into transaction budgets, potentially influencing deal structures, purchase price negotiations, and the scope of indemnity provisions. Moreover, the rise in disputes—34% of which now involve indemnity or R&W policies—highlights the importance of robust due‑diligence and clear contractual language. As interest‑rate volatility and currency fluctuations continue to pressure post‑closing performance, firms that proactively integrate tailored insurance solutions are likely to gain a competitive edge in a market where protection is becoming as critical as capital.