How is the M&A insurance market developing in Italy? Do you expect growth and, if so, what are the implications for deal making?

In my opinion, insurance cover in M&A transactions will surely grow significantly during the next three to five years. We have statistics at the moment that are based on 2016/17 and we have seen a great increase in coverage. We can report that 7 per cent of acquisitions valued below 25 million used M&A insurance in 2017, doubling from a year earlier.

This figure increases proportionally with the deal value, since the higher the deal value, the higher the frequency of insurance cover is.

This tool will greatly develop in the future, as it takes away from the negotiation deal breakers and other critical issues that may prevent the parties from closing the deal.

Comments by Lorenzo Bacciardi as part of the M&A Working Group Virtual Series publication titled ‘Slaying Uncertainty Assessing the contribution of insurance to the M&A process’. To read in full please click here.