BMS expects M&A activity resurgence after slower start to year

24 April 2023

Specialist insurance and reinsurance broker BMS expects the global mergers and acquisitions insurance market to pick up after a relatively slow start to the year.

BMS Head of Private Equity, M&A and Tax Tan Pawar says the subdued beginning has followed a couple of active years.

“However, momentum is growing, and we have not seen a decrease in enquiries from companies eager to obtain M&A insurance,” he says.

“With market conditions expected to stabilise, we should see a resurgence in deal activity by the end of Q2 and into the second half.”

Despite an increasingly challenging macroeconomic environment, the M&A market last year was close to matching the record-breaking deal volume of 2021 and BMS says appetite remains after growth of about 40% in insurance products purchased over the past 24 months.

Mr Pawar says in a global report that private equity and corporates continue to find opportunities, “distressed or otherwise”. But at the same time, the M&A insurance industry faces a critical juncture.

“Given the high volume of M&A transactions being insured in 2021 and in early 2022, the market is experiencing a notable uptick in claims notifications, including several multi-hundred-million-pound examples,” he says

“How insurers respond to those claims will dictate how M&A insurance is perceived by the community.”

Mr Pawar expects M&A insurance, which is common on private M&A transactions in Europe and North America, will remain a vital tool for practitioners when executing deals, not just in those regions but increasingly in other parts of the world.