Insurers bullish on M&A cover
With the heating up of the mergers and acquisitions space in India, insurers and international brokers are seeing business.
Willis BA, a global insurance broker, has launched the mergers and acquisitions practice in India. Besides offering insurance transactional services to mitigate risks from M&A transactions, Willis will also be offering wider consultative services, including due diligence and alternative risk treatment for private equity firms and corporates.
“In the last three years, we have been offering services in the US, Western Europe, Japan, China, Singapore and Australia and now in India. We see tremendous opportunity in both inward as well as outward deals in India. Indian corporates are investing internationally and there is a great domestic opportunity for international corporates buying in India,” said Alistair Lester, international practice leader for mergers and acquisitions, Willis.
Willis was recently involved in developing solutions for pharma giant Nicholas Piramal India’s acquisition in northern UK and Canada. A comprehensive merger and acquisition cover will comprise warranties and indemnities, environmental liability, tax opinion liability and contingency.
According to data available, there were 600 to 700 transactions involving Indian companies’ outward and inward deals by the end of November with an enterprise value of $25 billion.
“About 50 per cent of the 600 deals are conducted by private equity funds. In India, we see new business for us, given the volume of transactions that are rapidly increasing. Less than 1 per cent of the deals had an insurance cover, as awareness is low,” added Lester.
Willis will offer cover through Tata-AIG, Lloyds, Chubb and specialist underwriting agency, Ambridge.
“We already have an M&A product and covered a deal around two years ago. But, with the scene hotting up, we feel the demand for the product growing.” said Dalip Verma, managing director of Tata-AIG.
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