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Aon and Mergermarket Demonstrate Transaction Solutions Effectiveness, Emphasize Need For Stakeholder Collaboration

Latest claims study finds that the claims process overwhelmingly results in positive and appropriate resolutions for Aon clients

LONDON, 30 May 2023 Aon plc (NYSE: AON), a leading global professional services firm, and Mergermarket, a provider of intelligence, data and analysis of global M&A, today released the latest edition of their Transaction Solutions Claims Study. The continued expansion of the use of representations and warranties (R&W) and warranty and indemnity (W&I) insurance has led to an increased focus on claims activity and, as a result, further global collaboration around claims issues and resolution.

This year’s study reports that 2022 was characterized by several large claims settlements, resulting in significant payments by insurers. Since the previous year’s study, Aon has helped clients secure more than $260 million in loss paid and more than $350 million in total loss when recognizing erosion of the policy retention in North America. These figures are among the highest Aon has recorded in one calendar year to date — and the average amount paid per claim in 2022 was higher than the average payment on claims settled in each of the previous two years.

This year’s report also provides updates from Aon’s global claims practice. The Europe, Middle East and Africa (EMEA) region reports that 14 percent of policies issued between 2017-2022 have received notification of a claim, with the top breach types being tax, financial statements, litigation and compliance with laws. The Southeast Asia and Pacific (APAC) region has also released its data for the first time, providing insight based on a decade of claims experience across the region.

With new claims emerging and complex claims from prior years driving toward resolution, Aon continues to see the claims process evolving. Insurer expectations that clients comply with policy obligations, specifically around consent and cooperation provisions, have become a point of emphasis. There has also been continued refinement of diligence in relation to valuation models and damage calculations to validate alleged losses.

“Gaining insight into global M&A insurance claims activity is critical to helping our clients make better decisions on how they manage deal risks in order to improve outcomes,” said Stephen Davidson, Aon’s head of claims in Transaction Solutions. “The results of this claims study demonstrate that we continue to see our clients successfully look to the policies to protect their investment when they have suffered a loss, but that the claims process requires partnership by all stakeholders to create a smooth experience. With all that said, we continue to see the claims process overwhelmingly result in positive and appropriate resolutions for Aon clients.”

Based upon Aon’s proprietary global data, this study examines emerging trends with respect to claim size, frequency and severity on policies placed in North America, EMEA and APAC. In addition, 18 insurers participated in Aon’s North American Insurer Survey to provide a broader view of the claims landscape, increasing industry participation over last year and providing even more clarity on the state of claims in the North American market.

Highlights of the annual claims study include:

  • In North America, Aon clients have filed more than 800 total claims on R&W policies since 2013. Of those, 33 percent settled within the policy’s retention, 15 percent resulted in payment by the insurer, 34 percent remain active, 14.5 percent are inactive and 3.5 percent have been denied.
  • Through the end of 2022, R&W insurers have paid more than $820 million to Aon clients in North America and recognized more than $1.1 billion in total loss (including retention amounts).
  • More than $245 million has been paid to Aon clients on claims filed more than 12 months post-close of the transaction.
  • Through 2022, insurers paid more than $95 million to Aon clients on W&I claims in EMEA, with $35 million paid since last year.
  • Aon Australia and New Zealand saw claims notified on an average of 20 percent of the W&I policies placed from 2012-2022.

Aon’s M&A and Transaction Solutions is a leading M&A advisor and innovator of solutions and services that help secure investments, maximize deal value and drive transaction success by solving wide-ranging issues facing dealmakers throughout the deal lifecycle.

Solutions and services include transactional insurance instruments such as representations and warranties or warranty and indemnity insurance and tax and litigation insurance; specialized due diligence, including people and human capital, insurance, cyber and intellectual property; working capital solutions; and digital, cyber and intellectual property transaction advisory capabilities.

Working across industries and covering more than 35 countries, Aon’s highly experienced teams use proprietary industry data and insights drawn from the more than 4,000 global deals supported annually.  

To view the study, please visit LINK.

About Aon
Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their business. 

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