Aon research highlights a key market differentiator in the insurance sector

Latest Claims investigation for global transaction solutions by Aon and Mergermarket highlights the importance of handling insurers’ claims in the transactional solutions insurance market. It noted that despite a slowdown in M&A and representations and warranties (R&W) underwriting in 2023, Aon clients continued to achieve favorable claims outcomes.

The study found that Aon customers filed more than 140 new research and operations claims last year, bringing the total to more than 950 in North America by 2023. Of these claims, 39% were settled under the policy, 17% resulted in insurer payments , and 24% remain active, 16% are inactive, and 4% declined.

R&W insurers have paid out more than $1 billion to Aon customers in North America, including $550 million in the last three years. Claims filed in the 12 months after the deal closed resulted in payments worth more than $300 million. In EMEA, insurers paid out more than $120 million, with more than $20 million paid out since the last report. In Australia and New Zealand, claims have still been made on one in five warranty and indemnity policies since 2012.

In 2023, in a competitive environment, prices were reduced and the scope of protection was expanded, and the effectiveness of insurers’ claims turned out to be a key factor. Customers now value fair and effective complaint processes over price alone.

“Gaining insight into the global M&A insurance claims business is critical to our clients’ effective risk management,” said Stephen Davidson, Claims Director for Transactional Solutions at Aon. “Collaboration between stakeholders is essential for a smooth claims process. Often, when we see this collaborative approach, we see positive and appropriate solutions for Aon customers.”

Aon Transaction Risk Solutions

Aon helped customers process over 150 new claims in North America and 48 in EMEA in 2023. In Australia and New Zealand, historical claims rates remain steady at almost one-fifth of policies. The study now includes more comprehensive data from North America and EMEA. Eighteen insurers participated in the Aon North American survey and 14 in the EMEA survey.

“At Aon, we consistently strive for win-win solutions, which reflects our commitment to customer satisfaction,” said Claire Fleetwood, senior claims adjuster for M&A and transaction solutions at Aon.

In 2023, Aon helped clients protect nearly $250 million in losses in North America and nearly $50 million in EMEA and APAC.

“As the transaction solutions market matures, sophisticated buyers are gaining greater insight into claims handling across the industry,” said Anthony Dragone, senior vice president of the Claims, M&A and Transaction Solutions team at Aon.

Key conclusions from the study:

• R&W insurers have paid out more than $1 billion to Aon customers in North America through 2023.
• Regulatory compliance has become the third most important loss driver.
• The average estimate of claims losses from 2020 to 2023 increased to $13 million.
• Industries have demonstrated different types of violations:

  • There have been many violations of the law in the retail and consumer sectors.
  • There were more significant breaches of contract in financial services.
  • Energy companies more often cited violations of the principles of asset representation.

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