2022 Lockton Transaction Liability Market Update

At this point in 2022, what is happening in the representations and warranties market?

With three quarters of the year in the books and the year-end push not yet upon us, Lockton’s Transaction Liability (TL) Team presents this market update to detail the state of the representations and warranties insurance (RWI) market, report on recent RWI claims trends, and outline the dramatic growth of our tax and contingent liability insurance practices.

In some ways, the TL insurance landscape has changed markedly since the close of 2021. RWI pricing has largely normalized, with the late 2021 spike in rates reverting to levels approximating those that we observed during the early part of last year. This softening in the market overall has been driven by several factors, including decreased deal volume and increased carrier capacity. 

But much has remained the same. As the RWI market has continued to mature, insurers’ risk appetites, industry preferences and drafting approaches have become sufficiently consistent so as to permit experienced brokers to accurately predict reactions to submissions. Moreover, year-to-date claims data suggests continued strength and stability, with favorable payment trends and a willingness by carriers to accept multiplied damages claims in appropriate circumstances.

For the full 2022 Lockton Transaction Liability market update, click here (opens a new window). For a few high-level takeaways from the update, download the PDF.

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