The Impact of Covid-19 on R&W/W&I - Euclid Transactional December 2020 Update

10,000 requests for R&W/W&I insurance in a single year seemed unlikely in the past, but November’s M&A activity led to a couple of weeks where Euclid Transactional hit that pace with an average of over 200 submissions per week. In a record November 2020, we bound over 35% more policies and reviewed over 50% more submissions than in November 2019. November had five times more submissions than April, when Covid-19 slowed M&A considerably. For the past 13 weeks, average deal sizes have ranged around $300 million to $450 million, significantly higher than April through June where the range was typically around $150 million to $250 million and when Covid-19 prevented many larger deals from signing. The aggregate cost of our US primary policies continued to rise in November and were around 20% higher than in November 2019. We attribute this increase in rate to clients and brokers recognizing that Euclid and other established markets have paid hundreds of millions of dollars of claims over the last 12 months, and valuing insurers that have a proven track record for deal execution and fairly and efficiently paying claims. 

Do these numbers line up with what you are seeing in the deal world and the quotes you are receiving for R&W insurance? Do you expect this high deal volume to continue into 2021? Feel free to reach out to Euclid Transactional to discuss this data or anything else.

Euclid Transactional Global R&W/W&I 2020 vs. 2019

Euclid Transactional Global R&W/W&I Recent Weekly Submissions and Average Enterprise Values