In the first half of 2025, submissions for warranties and indemnities (W&I) coverage of M&A transactions in the Asia-Pacific (APAC) region increased significantly, exceeding the level of submissions seen in the same period over the past two years.
With more capacity coming into the M&A insurance market throughout 2024 and H1 2025, rates for policies covering transactional risks have become more attractive to prospective buyers, with coverage offered on highly favourable terms for insurance clients.
Alongside this, continuing uncertainty about current geopolitical tensions and global economic challenges are driving appetite for W&I coverage in the region, as dealmakers look for more security around transactions.
However, despite that background uncertainty, greater clarity around trading relationships, stabilising inflation, and falling interest rates have contributed to increased confidence across the region, with access to capital becoming easier for acquirors.
While the uptick in APAC W&I business seen towards the end of last year slowed in the first half of 2025, we see strong potential for W&I business to pick up in the fourth quarter this year, with that uptick possibly continuing into 2026. We would also expect rates to harden during H2 2025 and into 2026.
Notwithstanding the increased appetite for insurance to cover transactional risks, we have observed some markets pulling out of W&I business in the region and anticipate that more may follow this year.
Coverage remains broad, but the softening market that has led to some carriers exiting the class appears to have bottomed out this year.
In terms of individual territories, we are seeing the most significant interest in W&I products from Japan and India. Australian business has remained consistently good, with this market, out of all of the APAC regions, the least affected by global economic and geopolitical concerns. Business in the remainder of southeast Asia remains fairly flat.
However, the big story for the APAC M&A market is that larger deals are coming back. Deal sizes began to increase in 2024 and we have seen that trend continuing into 2025.
The strongest growth in deal-making activity has been seen in sectors including healthcare, education, data centres and infrastructure more generally. We’ve also seen a number of deals come to market for assets in the pharmaceutical and waste management sectors.
Construction deals, conversely, appear to be difficult to get over the line – particularly in Australia where there have been a number of insolvencies. Successfully exiting retail businesses also appears to be challenging for sellers currently.
Elsewhere, there have also been instances of deals coming to market off the back of corporate restructuring, with companies in Japan and New Zealand looking to focus on their core business and spinning off non-core assets.
Alongside corporate appetite for M&A and interest in W&I cover, there continues to be a global push for private equity funds to invest in APAC, which is driving additional appetite for W&I coverage.
