Claims activity rises in R&W for Aon clients: Report

Claims activity under representations and warranties insurance in 2024 was the highest Aon PLC has recorded for its clients, according to a report the brokerage released Tuesday.

In North America last year, clients of Aon received more than $300 million in total payments, with a median of $5.5 million, according to the sixth annual Aon Transaction Solutions Global Claims Study. Both numbers were the highest for a calendar year since the inception of the report.

The report said Aon’s North America claims team was involved in obtaining 39 payouts last year for representations and warranties insurance, also known as warranty and indemnity insurance. North America claims were driven by alleged breaches of warranties relating to compliance with laws, at 20%, followed by tax contracts, 17%, and material contracts, 13%.

In Europe, the Middle East and Africa, breach of tax warranties was the top driver by frequency for representations and warranties claims, at 26%. The leading drivers of paid claims were breaches of warranties relating to financial statements, 27%, compliance with laws, 13.2%, and material contracts, 11%.

In Asia-Pacific, the leading drivers of warranty and indemnity claims were breaches of warranties relating to material contracts, 19%, then legal compliance, and tax and license permits, at 12.5% of claims.

“R&W insurance has become an embedded part of dealmaking and risk mitigation,” Stephen Davidson, global head of claims, Aon transaction solutions, said in a statement with the report.