Merger & Acquisitions Trends

Despite the COVID pandemic ravaging the world, many aspects of the insurance industry continue to work despite the lockdowns. Mergers and acquisitions has seen continued growth in the field as many businesses seek to expand their sphere of influence.

With the pandemic, this has not slowed down but several trends have emerged during the long pandemic and lockdowns. These trends include:

1. High Volume: Despite the isolation, there are still many transactions. Through August, there have already been 649 Mergers & Acquisitions which have exceeded the record of 643 set in 2018. There is a belief that the virus will push this number up as diversification continues.
2. Private Equity Buyers: Many recent acquisitions have been made by private equity brokers. 66% of brokers were owned by such firms or some other capital investment firm. This is expected to continue in the future. They may have the money, but they don’t infrastructure and employees
3. Overall growth in the field: Mergers and Acquisitions are not limited to brokers. Since 2013 over $10 trillion have been spent in transactions across the industry. [1]

When it comes to covering these processes, a normal general liability will not cover all parts of the acquisition. Merger and Acquisitions policies can be added as a tail or extended coverage to a liability policy. They cover potential costs associated with the legal side, such as errors, missing and falsified information and potentially lawsuits associated with buying out a company.

As the virus keeps taking its toll, many brokers are looking to diversify their holdings to ride out this chaos. When things go wrong, a M&A policy would cover the costs of the mistake. Consult your provider on what is needed to protect your company in this process.

For Insight into Mergers and Acquisitions and Tail Policies, please click here: https://www.axisins.com/products/tail-coverage-insurance/

[1] https://www.insurancejournal.com/news/international/2020/07/16/575693.htm