Navigating the M&A Claims Surge: Why Insurers with Strong Claims Management are Poised to Profit

The global M&A market has entered a new era of complexity, driven by escalating ESG scrutiny, cybersecurity vulnerabilities, and geopolitical fragmentation. As transaction risks grow, so does the demand for robust post-merger risk mitigation tools—particularly insurance solutions that can absorb the fallout of litigation, regulatory penalties, and operational failures. Aon's data, though not explicitly citing a 2024-2025 claims surge report, reveals structural shifts in M&A risk profiles, favoring insurers with advanced claims management capabilities and diversified regional exposure.

The Rise of M&A Insurance as a Risk Buffer
Aon's 2023 M&A Risk in Review report highlights that 46% of respondents anticipate rising global deal volumes over the next 12 months, despite macroeconomic headwinds. However, these deals face unprecedented hurdles: 96% of executives expect heightened ESG due diligence demands, while 86% would walk away from a transaction over material cybersecurity risks. These trends are fueling demand for transaction insurance products such as adverse judgment insurance (which covers potential litigation damages) and judgment preservation insurance (which secures favorable court rulings).

The post-merger claims landscape is also evolving. While Aon's specific 2024-2025 data remains elusive, anecdotal evidence and broader market signals suggest a surge in claims tied to:
- ESG-related liabilities, such as environmental remediation costs or greenwashing penalties.
- Cyber incidents, including data breaches or ransomware attacks that disrupt merged operations.
- Litigation risks, as buyers increasingly seek guarantees against pre-acquisition liabilities.

Structural Tailwinds for Insurers with Strong Claims Capabilities
The M&A insurance boom presents a golden opportunity for insurers capable of managing these complex claims efficiently. Key attributes of winners in this space include:

1. Diversified Risk Exposure:
   Insurers with strong footprints in high-growth regions like EMEA and APAC are well-positioned. For example, Aon's broking network, combined with its judgment preservation insurance expertise, allows it to underwrite deals in emerging markets where traditional banks are hesitant. Similarly, Chubb (CB) has expanded its coverage for cross-border transactions, leveraging local underwriting teams to assess region-specific risks.

1. Low Claims Denial Rates:
   Insurers that resolve claims swiftly and fairly build trust with corporate clients. XL Catlin, for instance, has reduced its denial rate by 15% over three years by deploying AI-driven due diligence tools to pre-empt disputes. Such firms are likely to capture a larger share of the $200+ billion M&A insurance market.

2. Collaborative Broking Models:
   Partnerships between brokers and underwriters are critical. Aon's “risk transfer as a service” model, which combines its broking power with tailored insurance products, reduces transaction friction. This approach is particularly valuable for deals involving distressed assets or climate-exposed industries, where insurers must balance risk appetite with profitability.

Investment Implications: Focus on Diversification and Operational Excellence
Investors should prioritize insurers demonstrating:
- Portfolio breadth: Exposure to both traditional (e.g., litigation coverage) and emerging (e.g., parametric climate insurance) products.
- Regional agility: Strong underwriting capabilities in EMEA/APAC, where M&A volumes are growing faster than in North America.
- Data-driven claims management: Use of AI and predictive analytics to reduce settlement delays and denial disputes.

AON, Chubb, and Munich Re (MUBGn) are prime candidates. AON's broking scale and strategic broking-insurance partnerships give it an edge in structuring complex deals. Chubb's underwriting discipline and global reach make it a leader in high-risk M&A coverage. Munich Re's parametric solutions, meanwhile, are increasingly sought after for climate-exposed post-merger assets.

Caveats and Risks
- Regulatory headwinds: PFAS liabilities and social inflation in U.S. casualty markets could pressure underwriting margins.
- Market cyclicality: Insurers reliant on volatile sectors (e.g., oil/gas M&A) may face boom-bust cycles.

Final Call: A Structural Trend, Not a Fad
The shift toward risk-aware M&A is structural, driven by ESG imperatives, digital disruption, and geopolitical fragmentation. Insurers with the foresight to invest in claims infrastructure, regional networks, and innovative products will dominate this space. For investors, this is a long-term play: allocate to firms that combine operational resilience with geographic diversification, and avoid those lagging in claims resolution. The M&A insurance boom is here to stay—and its winners will be defined by how well they manage complexity.

Investment thesis: Overweight insurers with low denial rates, strong EMEA/APAC exposure, and collaborative broking models. Avoid single-sector players or those with high U.S. casualty exposure.