W&I insurance popularity drives innovations

Author: Jimmie Franklin | Published: 11 Dec 2019

W&I insurance has grown in popularity consistently over the past decade, which is driving tough competition – and innovation – between insurers.

Market participants are already seeing firms beginning to innovate beyond the traditional cover.

"Innovations include synthetic W&I cover, allowing use of the product for public-to-private deals, and carve outs from listed businesses. Due to publicly-available information, no warranties are usually offered," said one source who leads on transactional risk and M&A for a global insurance company.

Using a synthetic W&I product is where there are no warranties given by the seller to the buyer, therefore the W&I insurer drafts and covers a bespoke warranty package outside of the transaction documentation (which does not have the protection of the usual transactional disclosure process).

The source has also noticed a new type of protection: a policy covering the risk of new breaches...