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Risk in Context Podcast: M&A risk and insurance pitfalls

Interest in global mergers and acquisitions — that hit an all-time high in 2021 — is continuing this year. But companies that seek to buy or sell their businesses need to be aware of the new risks they may face and employ comprehensive due diligence through the entire M&A process.

Interest in global mergers and acquisitions — that hit an all-time high in 2021 — is continuing this year. But companies that seek to buy or sell their businesses need to be aware of the new risks they may face and employ comprehensive due diligence through the entire M&A process.

In this episode of Risk in Context, James White, head of transaction advisory for Marsh UK and Ireland, talks with Suzanne Jones, who leads Marsh UK’s corporate M&A team, and Scott Brady, leader of the US’s east M&A team. They discuss the significant risks and potential insurance challenges that companies should keep in mind and also prepare for ahead of a merger or acquisition.

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Key takeaways

Global uncertainties are impacting valuations.

While deal activity shows no signs of slowing down, buyers are more wary of valuations during an uncertain environment.

Risk and insurance due diligence is critical during an M&A process.

Understanding a target’s current and future insurance program can help prevent adverse surprises following a merger or acquisition, especially considering the current inflationary environment that could lead to higher reinstatement costs.

Required risk improvements should be scrutinized

Buyers should look out for any outstanding risk improvements that companies have not yet implemented and that are likely to be required by insurers following a transaction.

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