Liability insurers are highly averse to risks they cannot accurately quantify and that could present major payouts. Insurers’ risk aversion can be traced back to their being swamped with claims in the wake of deaths linked to asbestos in the latter half of the last century, a phase that nearly broke the Lloyd’s insurance market.
Since those claims, “many insurers routinely insist upon exclusions for various emerging risks in their policies”, explains Bob Reville, chief executive at insurtech firm Praedicat. The company found in a recent survey that 83 per cent of underwriters see their job as “protecting their company against the next asbestos”, which might be mobile phones, wifi, nanotechnology, 3D printing, fracking or anything else. “When they do that job by adding exclusions, this can leave their clients exposed,” says Dr Reville.
Mergers and acquisitions are undergoing a period of immense change. Many corporates will spend cash assertively to beat incoming economic and disruptive challenges. For others, the changing supply of liquidity and debt will rattle nerves and provoke hesitancy. Given the economic environment, trade tariffs, and Chinese capital controls, buyers have the choice to sit still or take the reins of change. Focus on target selection, diligence and execution will be paramount to capturing success.
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