Rising M&A insurance claims in Asia-Pacific: Trends of maturity and complexity in Oceania markets

Introduction

As the M&A market in the Asia-Pacific region matures, the number and value of transaction risk insurance claims are rising rapidly. According to Aon's 2026 Global Transaction Solutions Claims Study, a leading global insurance brokerage firm, the company has processed and paid out over $26 million in claims in the Asia-Pacific region over the past three years, many of which were high-value cases. Notably, this trend first emerged in Australia and New Zealand—not only were these two countries the earliest adopters of M&A risk insurance, but they have now become important bellwethers reflecting the increasing complexity of the broader Oceania economy.

This article will analyze the underlying reasons for the rise in M&A insurance claims from the perspective of the Oceania region, examine the specific impacts on the economies of Australia, New Zealand, and Pacific Island nations, and explore potential long-term trends over the next 3 to 10 years.

Background

According to Aon's research, transaction risk insurance primarily includes warranty and indemnity insurance and standalone tax liability insurance. This type of insurance was first widely adopted in M&A transactions in Australia and New Zealand, later expanding to markets such as India, Singapore, and South Korea. In recent years, with increased underwriting capacity and market acceptance, the claims pattern in the Asia-Pacific region has largely aligned with global trends.

Key triggers for claims include incomplete disclosure, inaccurate financial statements, compliance violations, and tax-related risks. Notably, tax-related claims often emerge five years after transaction completion due to audit cycles and regulatory enforcement timelines.

In-depth Analysis

Regional Economic Impact: Market Maturity in Australia and New Zealand

As the earliest adopters of warranty and indemnity insurance in the Asia-Pacific region, the maturity of the M&A markets in Australia and New Zealand directly influences the frequency and complexity of insurance claims. Aon data shows that high-value claims (exceeding $10 million) in the Asia-Pacific region are increasingly linked to large-scale and cross-border transactions, with Australian and New Zealand companies being key participants in such deals.

For the Australian economy, a rise in insurance claims may indicate two things: first, increased M&A activity itself, and second, a more complex risk structure in transactions. Australia’s mining, energy, agriculture, and financial services sectors have long been hotspots for M&A. As these industries face more stringent regulatory and cross-border compliance requirements, insurers need more refined risk assessments. In New Zealand, the relatively smaller market size means that each transaction has a more amplified impact on the overall economy, and claims events could affect investor confidence.

Trade Impact: Tax and Compliance Challenges in Cross-Border Transactions

Another major driver of M&A insurance claims is tax and regulatory disputes. The report points out that cross-border transactions often involve multinational structures and financing arrangements, making them more prone to tax issues such as capital gains tax exemptions, withholding taxes, and net operating loss treatments.For trade corridors in Oceania, particularly cross-border investment flows between Australia, China, and ASEAN, an increase in such insurance claims may prompt transaction parties to allocate more resources to due diligence, thereby extending transaction timelines but also reducing the risk of post-deal disputes. For Pacific island nations reliant on exports and foreign capital—despite their smaller transaction sizes—if mergers or acquisitions involve foreign investors, the prevalence of tax insurance could mitigate potential policy risks and attract more stable long-term capital.

Investment Impact: Capital Flows and Industry Preferences

Aon’s research also indicates that claim triggers vary significantly across industries. For example, consumer and retail transactions are more susceptible to regulatory scrutiny, customer liabilities, and inadequate disclosure; the technology and payments sectors face risks related to licensing, certifications, and contract concentration.

In Oceania, Australia’s technology and energy transition sectors are attracting substantial foreign investment, while New Zealand’s agricultural and tourism assets remain M&A hotspots. Insurance claim data reflects the potential risk points in these industries, potentially guiding investors to focus more on compliance management, thereby influencing the industry structure of capital inflows. Infrastructure and energy projects in Pacific island nations often rely on international development financing and private capital; the adoption of transaction risk insurance may reduce project financing costs but also increase upfront expenses.

Development Impact: From Risk Hedging to Institutional Improvement

The proliferation of M&A insurance is essentially a manifestation of financial market deepening. For Oceania, it is not only a risk transfer tool but also promotes transparency and standardization in transaction practices. Australia and New Zealand were pioneers in introducing warranty and indemnity insurance in the Asia-Pacific region, setting benchmarks for neighboring island nations. As Fiji, Papua New Guinea, and other countries attract more foreign direct investment, the promotion of similar insurance products can help establish a more credible investment environment and reduce disputes arising from inadequate disclosure.

Furthermore, the expansion of standalone tax liability insurance in markets such as Australia and India means that companies in Oceania can more effectively manage uncertain tax obligations when making cross-border investments, thereby encouraging two-way investment within the region.

Regional Comparison: Australia/New Zealand vs. Pacific Island Nations

The M&A insurance markets in Australia and New Zealand have reached a high level of maturity, with a wealth of claim cases and experienced market participants. In contrast, M&A activity in Pacific island nations is relatively limited, but similar insurance is beginning to be introduced in transactions involving development finance institutions and aid programs. For example, some infrastructure projects funded by the World Bank and the Asian Development Bank may require insurance to guarantee tendering and contract execution.

In terms of risk types, the Australia–New Zealand market focuses more on financial disclosure and compliance issues, while the island nation market may place greater emphasis on political risk and force majeure arising from natural disasters. This differentiated development within Oceania requires insurers to offer customized products tailored to the actual needs of different economies.

Long-Term Trends## Long-term Trends

Looking ahead 3 to 10 years, M&A insurance claims in the Asia-Pacific region are expected to grow further. Aon noted that as more policies mature, claims activity will become more frequent. Against this macro trend, Oceania may experience the following changes:

• Short-term (3 years): M&A transaction volumes in Australia and New Zealand remain stable, insurance penetration continues to rise, and small and medium-sized transactions are also adopting warranty and indemnity insurance. Tax-related claims cases increase, especially those involving cross-border transactions. Pacific Island countries begin piloting small transaction insurance programs.
• Medium-term (5 years): Insurance products expand from standard warranty and indemnity insurance to more specialized areas, such as environmental liability insurance and the combination of cyber insurance with M&A. Cross-border M&A within Oceania (e.g., Australian companies acquiring assets in New Zealand or Fiji) will more commonly use insurance tools.
• Long-term (10 years): M&A insurance becomes a "standard" for large and medium-sized transactions in Oceania. Pacific Island countries establish a unified insurance framework through regional cooperation mechanisms (e.g., the Pacific Islands Forum), lowering barriers for foreign investment. At the same time, the accumulation of insurance data helps regional economic policymakers identify systemic risks and optimize investment regulations.

Conclusion

The rise in Asia-Pacific M&A insurance claims is not accidental, but the result of the combined effects of regional economic integration and the deepening of financial markets. For Oceania, Australia and New Zealand, as pioneers, their experience reveals the evolving direction of risk management in complex transactions: from passive response to proactive hedging. Pacific Island countries can take this opportunity to learn from mature models and embed insurance mechanisms in development financing and investment promotion to enhance resilience.

From a broader perspective, this trend indicates that Oceania's economy is shifting from "transaction volume-driven" to "transaction quality-driven"—market participants value compliance, transparency, and long-term value more than simple scale expansion. This has positive implications for the sustainable development of the regional economy.

Source: Aon 2026 Global Transaction Solutions Claims Study, and related reports from Asian Business Review (https://asianbusinessreview.com/insurance/news/asia-pacific-ma-insurance-claims-climb-complex-deals）。