Report Finds Mergers and Acquisitions Claims On The Rise, With $1 Trillion On The Line

The fourth annual edition of AIG’s M&A Claims Intelligence Series reveals increases in the severity and long-tail nature of M&A claims that, coupled with a competitive marketplace, declining rates and broadening terms and conditions, could mean serious challenges to profitability — and an increased likelihood of higher rates.

Claims notification frequency as a whole has remained stable at 20%, but for deals in the $500 million to $1 billion range, frequency has increased from 21% to 26%.

The proportion of claims valued over $10 million have doubled year on year, from 8 to 15%, with an average cost of $19 million.

The report quotes Mary Mclvor, global head of M&A claims at AIG, as saying, “We are seeing the severity claims on an increasing frequency and the interesting thing about that is we are seeing them all over the globe.”