Two years after sweeping the planet, Covid-19 continues to have an impact on the national and international ecosystem. The world of insurance is no exception. Specialized in guaranteed liability insurance, or “W&I insurance”, and tax risks, Transact offers insurance solutions adapted to eclectic customers.
A buoyant market modified by Covid-19
Few markets have not been affected by this global crisis and that of transactional insurance was strongly affected by the first confinement, the successive stoppages of activity having generated a plethora of uncertainties weighing on the valuation of companies and the execution of their main contracts. Although M&A activity quickly returned to normal for a majority of sectors, before reaching peaks with the highest number of transactions in 2021-2022, the crisis continues to have an impact on the trend of transactions for certain sectors such as the hotel industry, which is still impacted, or IT and medical carried by the impacts of Covid.
There is also a change in the attitude of the parties towards the use of W&I insurance. If before Covid-19, these insurance products were used to facilitate transactions by reducing the seller’s residual liability, particularly in the context of “auction” processes, it now seems that more and more buyers are spontaneously looking for a insurance to ensure that you have a reliable remedy in the event of a breach of warranties. Covid-19 has thus made it possible to confirm the role of the insurer, seen as a solid and effective guarantor. Transact is the perfect illustration of this.
Transact Risk Partners: expertise in insurance for mergers and acquisitions and tax risks
Transact is a managing general agency (MGA) specializing in insurance for mergers and acquisitions and tax risks. As an MGA, Transact has a mandate from insurers to negotiate specialized insurance policies for which Transact has the necessary resources and expertise. This structure allows Transact to focus on the underwriting and needs of multiple and diversified clients, including investment funds, industrials and private equity. Transact specializes in insuring files for which the risks are located in France, Benelux and Germany.
To do this, Transact distinguishes itself by its internal expertise and its vast network of tax advisers. The team is in fact mainly made up of former M&A and tax lawyers, all aware of the real challenges of clients, having been trained and having worked in “top tier” or “Big Four” firms. The transactions and requests of each party are thus perfectly managed, analyzed and controlled. This field of technical skills coupled with field experience allows Transact to work actively on the operations and markets in which it specializes. Transact intervenes to facilitate the transactions of its customers, and not to add a new step in the very short deadlines which are theirs, which is often the fear of customers. The analysis of the files and the issuance of a tailor-made insurance policy must fit perfectly into the schedule of operations.
This expertise is also reflected in claims management: the response to customers must be quick and pragmatic, as must compensation for damages.
Liability guarantee and specific compensation insurance contracts (W&I)
Little used about 5 years ago in France, more and more French companies now take out W&I insurance. Some players even estimate that such insurance would now be taken out in 15% to 20% of transactions in France, suggesting significant development potential. As a reminder, these insurance contracts are intended in particular to offer specific coverage in the event of breach of the declarations and guarantees contained in the acquisition contracts. Such a policy provides protection to buyers, sellers, but also to intermediaries involved in a merger or acquisition process. Backed by significant experience and enriched know-how, Transact provides its customers with personalized and adapted solutions to quickly secure their transactions.
Tax risk insurance
With acquirers facing complex tax regulations, the repercussions can be unpredictable and have a significant impact on businesses. Whatever the situation, this insurance tends to insure an identified but unrealized tax risk. The objective is then to provide protection against this potential tax liability, and thus to be able to allow clients to carry out transactions without bearing insurable tax risks. Transact thus provides tailor-made, pragmatic and innovative solutions to each client, whether by integrating these tax coverages in W&I insurance policies or in independent tax insurance. The risks frequently insured in France relate to the IFU and DAS2 declarations as well as the “3% tax”.
A progressive and pragmatic approach to insurance adapted to the French market
Since its inception in 2017, Transact has succeeded in redefining the underwriting process. Today, Transact is the leader on the Benelux market and one of the main players on the French market. With values based on innovation, efficiency and rigor, Transact offers a pragmatic and visionary approach to insurance. To date, no less than 700 operations have been carried out for a total amount of 9.4 billion euros in risk. Transact is positioned in particular on the market thanks to a French and French-speaking team, led by François Piquet and currently growing, making it possible to understand the specificities of the French market and to work both in English and in French according to customer requests.