With continued economic volatility and the uncertainty of Brexit ahead, stakeholders are becoming more cautious about mergers and acquisitions and insurance can play an increasingly valuable role.
Against this backdrop, Chubb launched a suite of international transactional insurance products in the UK and Ireland.
Richard Britain, Head of Transactional Risk, explains that Chubb’s international transactional risk proposition differs from that of many peers. “We are not looking to just replicate the offerings of our competitors” he says. “Chubb only wants to be in markets or sectors where we can offer something different or where we have the skills.”
“Some providers of transactional risk insurance can only offer dedicated warranties and indemnities and limited contingent liabilities cover. But given the size, scale and breadth of expertise at Chubb, we can offer much more, both in terms of our broader liability expertise and our global reach” Tressie Norton, Transactional Risk Underwriter, explains.
Today, many deals have an international element and Chubb is increasingly using its international network to service opportunities in regions such as Europe, Asia and Africa. “We see increasing demand for insurers to offer capacity in international markets where the required limits are now so large that they cannot be covered by a single provider,” says Richard.
At the heart of Chubb’s offer is W&I insurance, the mainstay of the transactional risk business. This provides cover for damages arising from an unknown breach of a seller’s warranties made in connection with an acquisition or merger. Chubb’s W&I cover can be purchased by either buyers or sellers of a company and the product is expected to be particularly attractive for private equity firms.
Thanks to its specialist expertise in other key areas of risk, Chubb’s transactional risk team can also tap into the experience of their colleagues. For example, liabilities such as cyber, environmental or product liability are areas that concern risk managers and will require them to coordinate the risks of the acquirer with that of the acquired business, and align their various insurance programmes, according to Tressie.
An acquired company could already have been the unwitting victim of a cyber attack or data theft, while poor data security could jeopardise the systems of the merged group. “As companies rely more and more on data, cyber security and liability is a growing area of concern for them and is increasingly a feature of due diligence,” Richard adds.
Chubb’s policies are tailored to each specific transaction. The product suite is initially aimed at buyers and sellers with medium-sized to large transactions. Policy limits of up to US$50 million are on offer.
For more information, visit Chubb’s Transactional risk insurance page.
If you have questions or would like to arrange for an introduction to transactional risk insurance for your team, clients or prospects, get in touch with Richard Britain or Tressie Norton.
Based in London, Richard Britain has been tasked with developing Chubb’s transactional risk proposition outside North America. With more than ten years’ experience of advising on the use of warranties and indemnities (W&I) insurance, he joined Chubb in 2016 after more than two decades as a corporate M&A lawyer. Tressie Norton has since joined him, as a transactional risk underwriter dedicated to the UK and Ireland. Tressie was previously Senior Financial Lines Underwriter at Chubb, and started her career in 2004 at Lander & Rogers in Melbourne, before moving in-house to be a Senior Claims Examiner, at AIG Australia and Chubb in London.
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Chubb is the world’s largest publicly traded property and casualty insurer. With operations in 54 countries, Chubb provides commercial and personal property and casualty insurance, personal accident and supplemental health insurance, reinsurance and life insurance to a diverse group of clients.
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