Closing the Deal Is Only the Beginning

Growing Maturity of M&A Insurance Claims Puts Spotlight on the Value of Expert Broking

For buyers and sellers, closing a merger and acquisitions (M&A) transaction can feel like the finish line. But when representations and warranties (W&I) insurance forms part of the transaction, the real test of that protection may only come after the deal has closed.

Aon’s 2026 Transaction Solutions Global Claims Study points to a significant evolution in the W&I claims environment, with claims becoming more frequent, arriving earlier in the policy lifecycle and spanning a broader range of circumstances. The study examines the current M&A deal environment, the catalysts and impacts

of significant claim payments, and the increase in the number of claim notifications around the globe.[1]

“For businesses and investors active in Africa and Southern Africa, these trends highlight an increasingly important consideration: Having W&I cover in place is only one part of the risk management equation. Understanding when and how that cover comes into play when a problem emerges is just as important,” says Michael Lock, Executive Director of M&A and Transaction Solutions at Aon.

A Changing Claims Landscape

The growth in claims activity is one of the clearest signals from the study.

·         In 2025, notifications submitted under W&I policies placed by Aon increased by 47% compared with 2024, while projected ultimate claim frequency for the 2025 underwriting year is expected to exceed the long-standing 20% benchmark. Aon also reports that clients recovered more than $60 million on transaction solution claims in 2025.

·         Claims are also appearing earlier. Of the W&I policies Aon placed in 2025, 9.5% had received a claim notification by the end of that year. More recent policy years are tracking above historical experience, pointing to a shift towards earlier engagement with the claims process.

“This does not necessarily mean that W&I insurance is failing to perform as intended. In fact, it may demonstrate the increasing sophistication of the market,” Lock explains. “As buyers, sellers and their advisers become more familiar with W&I, they are becoming better equipped to recognise potential breaches, understand the policy response and notify claims earlier. In other words, greater claims activity can also reflect a more mature understanding of the protection that has been purchased.”

For African markets, where transaction structures and the use of W&I insurance continue to evolve, this is an important distinction. The question is not simply whether claims will arise, but whether businesses are prepared to manage them effectively when they do.

Claims Are Becoming Broader and More Complex

The nature of claims is evolving alongside their frequency. Financial statements and tax warranties continue to feature prominently, with financial statements, material contracts and compliance with laws among the leading breach types by paid loss. At the same time, other areas – including litigation, disclosure and employment-related matters – are beginning to feature more consistently.

According to Lock, there is movement at both ends of the severity spectrum. “We are seeing an increasing number of larger, more complex matters, including initial notifications involving claimed losses of eight figures or more. At the same time, lower retentions mean that smaller matters are increasingly entering the claims process."

Average retentions declined from 0.71% in 2021 to 0.27% in 2025, excluding policies with nil retentions and for insureds, this creates a more nuanced claims environment. A claim does not have to be a catastrophic event to warrant attention, while a high-value claim may involve significant complexity around proving both the breach and the resulting financial loss and that is where the quality of the claims process becomes critical.

Having A Policy Is Not the Same as Having a Claim

One of the most important messages emerging from Aon’s study is that W&I claims are not simply a matter of identifying something that went wrong and expecting the insurer to pay. The insured still needs to demonstrate the breach, establish causation and substantiate the resulting loss.

Insurers surveyed for the study identified establishing a breach of warranty and quantifying the loss as the two most frequently encountered coverage issues. When it comes to the claims process itself, inadequate information to assess the breach and inadequate information to assess the loss were ranked as the most common challenges.

“This is particularly important when a loss is complex or involves a reduction in the value of a business. Quantifying such a loss may require financial analysis, expert evidence and a clear understanding of the valuation methodology used when the transaction was originally completed” says Lock. “A large number attached to a claim does not, by itself, establish the amount that an insurer will ultimately pay. The strength of the evidence supporting that number matters.”

The Role of the Broker is Critical

The value of an experienced broker does not end when the transaction closes. In fact, when a potential breach emerges, your broker can become an important link between the insured, its advisers and the insurer – helping to turn a potentially complicated situation into a structured claims process.

That starts with understanding the policy, says Lock. “The wording of the W&I policy, including the specific warranties covered, exclusions and other policy provisions, needs to be considered alongside the underlying transaction documents. A strong claim notification should clearly explain the factual background, identify the relevant warranty and set out why it is believed to have been breached. Where possible, it should also explain the loss flowing from that breach.”

An experienced broker can help the insured anticipate the questions an insurer is likely to ask, identify gaps in the evidence and bring the appropriate legal or financial expertise into the process, early.

This can be particularly valuable in complex African transactions, where a deal may span multiple jurisdictions, regulatory environments, currencies and legal frameworks. The ability to understand the transaction in its broader commercial context, while navigating the requirements of the policy, can help avoid unnecessary delays and uncertainty.

Claims Management Should Start Before a Claim Exists

The study's findings also reinforce a broader lesson for dealmakers in the sense that claims management should not be an afterthought. The foundations for a successful claim are often established much earlier – during due diligence, policy placement and transaction negotiations.

“A clear understanding of the risks identified during diligence, the warranties ultimately provided, the scope of the W&I policy and any negotiated exclusions can make it significantly easier to assess a potential claim later,” Lock explains. “It is also important to preserve relevant documentation and evidence. Once a transaction has closed and a business is operating under new ownership, reconstructing the circumstances surrounding an issue, months or years later, can be challenging.”

Early engagement matters too. Aon’s experience shows that claims are increasingly being notified earlier in the policy period and for an insured, that makes having a broker who understands both the transaction and the policy particularly valuable.

A more strategic role for risk advisers

As M&A activity across Africa develops and W&I becomes a more established component of transaction risk management, the role of the broker is evolving.

“It is no longer simply about finding capacity and negotiating the most attractive policy terms. It is about helping clients understand how the protection they have purchased is expected to work in an environment where claims are becoming more frequent, earlier and more diverse,” says Lock.

For businesses and investors entering the African M&A market, the lesson is straightforward: The value of W&I insurance should not be measured only by the policy obtained at completion, but also by the quality of support and advice available if and when that policy is called upon.

In closing, Lock says that while the deal may be done, the risk doesn't necessarily end there. “And when it doesn't, having the right broker beside you can make all the difference between simply having insurance and being able to use it effectively.”

Ends…

Disclaimer

The contents hereof should not be construed as legal advice on any matter. You should not act or refrain from acting on the basis of any content included in this communication without seeking professional legal counsel. This communication does not constitute or create a lawyer-client relationship between us.

About Aon

Aon plc (NYSE: AON) exists to shape decisions for the better — to protect and enrich the lives of people around the world. Our colleagues provide our clients in over 120 countries and sovereignties with advice and solutions that give them the clarity and confidence to make better decisions to protect and grow their businesses. 

Follow Aon on LinkedIn, Twitter, Facebook and Instagram. Stay up-to-date by visiting the Aon Newsroom and sign up for News Alerts here.

[1] All Aon data cited in this study is derived from Aon’s internal, aggregated and anonymised claims databases and does not identify any specific client, insured, transaction or counterparty.