Transactional Risk Insurance Top Trends
4.1
Slower Market Growth and Industry Consolidation
The reps and warranties insurance market is not growing at the rate seen in previous years. A notable development has been the consolidation of Themis into Ryan, with Ryan taking over Themis’s book of business and absorbing its underwriters. Mergers like this can influence competition, pricing, and capacity in the sector.
4.2
Further Price Drops May Be Unsustainable
The market continues to be highly competitive. We have stopped seeing quotes for less than 2% of the limit, but we rarely see a quote as high as 3%. The rate is still much lower than it was in 2022, when it averaged 5.1% in the first quarter.
4.3
More Focus on Small Deals
The RWI market is evolving to better serve smaller transactions that were traditionally overlooked due to high costs and extensive diligence requirements. Two underwriting markets are creating products and processes specifically for smaller deals. They offer standardized policies, simplified underwriting, and cost-effective coverage, making RWI accessible for deals under $50 million.
4.4
Claims Activity Rises
We have seen an uptick in claims activity, which is a standard phenomenon across all insurance lines in a downturned economy. We anticipated this would cause more dissatisfaction with claims handling because insureds are making more speculative claims attempts. This has created an almost two-tier system for claims in RWI. Some insurers have started to push back on legitimate claims over small technicalities, while others continue to be positive in handling claims. We expect this will have a real impact on how clients choose an underwriter.
Unless there is a major shift in the deal environment, we expect these trends to continue into 2026.