Allianz introduces transactional liability program in North America
Allianz Group’s specialist corporate insurer, Allianz Global Corporate & Specialty (AGCS) has started a transactional liability unit in North America to help customers face inherent risks caused by M&A transactions.
This new program will provide financial protection especially to protect against errors made about target companies or businesses that link with mergers, acquisitions and divestitures.
This will be the first step of a broader regional rollout for AGCS, which will include Asia and Europe in the near future. AGCS is pairing with Euclid Transactional as its managing general agent (MGA), as well as several other carriers.
Euclid assigns top experts in M&A deals, specialising in the underwriting of representations & warranties, tax liability, contingent liability and other transaction insurance coverages.
“Given the continuously active and strong M&A landscape, we are excited to build a long-term partnership with some of the most respected underwriters in the industry and look forward to expanding our transactional and private equity related offerings,” said Paul Schiavone, regional head of Financial Lines, North America at AGCS.
“As a carrier partner with Euclid, we will be able to provide the specialised services needed to meet today’s competitive climate.”
Investors have spent a record of $3.8 trillion on mergers and acquisitions in 2015, and despite current market volatility, M&A activity is expected to maintain its strength in 2016, according to Bloomberg.
It was revealed in KPMG’s 2016 M&A Outlook Survey that 79 percent of M&A executives choose to close deals in the US, encouraged by a relatively healthy economy and receptive credit markets.
As buyers and sellers are not always predicting business operations and inherent risks, however, post-sale disputes are common and financial issues surface.
To help alleviate such matters and aid the process for a merger, acquisition, divestiture, or other business transaction, parties are purchasing more transactional liability insurance.
“The appetite for transactional liability has increased tremendously over the past couple of years with a global market penetration of 20 percent," said Bernard Poncin, global head of Financial Lines, AGCS.
“This business introduction is timely and a perfect fit for us, particularly in the US”
Reports reveal that from 2011 to 2015, use of transactional liability insurance has grown by 240 percent worldwide, with North America accounting for most of the growth in 2015 with 40 percent. The US is expected to provide the majority of growth in the near future.
The comprehensive pack of financial lines coverage AGCS provides, includes: financial institutions coverage, commercial management liability and professional indemnity liability (errors and omissions).
“This new partnership represents an exciting step in Euclid’s overall plan for growth and expansion,” said Jay Rittberg, managing principal of Euclid Transactional.
“We are so pleased to have Allianz join us as one of our first carrier partners, offering the financial strength and capacity required to execute and succeed in the ever-changing world of M&A.”
