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Liberty sees strong demand for M&A cover

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Demand for mergers & acquisition insurance has risen despite the COVID-19 pandemic affecting regional deal activity in the second quarter, Liberty Global Transaction Solutions says.

Head of Asia Pacific William Lewis says a strong start to the year, with a large number of deals in the pipeline, was disrupted in the second quarter.

“Having said that, surprisingly we’ve seen a 20% increase in requests for deal insurance when compared to last year,” he told the Liberty GTS podcast. “So, transaction risk insurance requests are up, but the size of those deal are down.”

Mr Lewis says a number of restructures are expected through the remainder of this year and into next year, particularly in retail and central business district real estate, driven by COVID-19.

Asia Manager Benn Wilson says the virus has provided a tailwind for some sectors that had already seen an uptick in activity, such as education, IT services and pharmaceuticals.

Awareness and adoption of warranty and indemnity (W&I) cover has also increased in recent years with the growth of M&A activity and the rising prominence of private equity funds in the region, he says.

“It must be said that we, together with our key brokers, have played a big role in growing the market in a sustainable way,” he told the podcast. “We feel extremely well-placed to realise the potential over the years to come.”