Whalesbook
India now accounts for 33% of all M&A insurance claims in the Asia-Pacific region. This rise in activity reflects a more mature corporate market where buyers increasingly use insurance to protect themselves against post-deal tax and compliance risks. For investors, this shift highlights the importance of thorough due diligence in a landscape where deal complexities are growing, particularly within private equity transactions.
What Happened
India has emerged as a major hub for mergers and acquisitions (M&A) insurance claims in the Asia-Pacific region. According to recent data from Marsh, India accounted for 33% of all transactional risk insurance claims in 2025, ranking it second only to Japan, which held a 40% share. This data tracks notifications filed by companies when they discover unexpected issues after a deal is completed.
Understanding M&A Insurance
To understand why these claims are rising, it is important to understand the insurance products involved. Most of these claims arise from Warranty and Indemnity (W&I) insurance and standalone tax liability policies.
Think of W&I insurance as a safety net. When a company is bought, the seller makes certain promises (warranties) about the company’s health, such as its tax status or compliance with laws. If the buyer discovers later that these promises were broken—such as finding a hidden tax debt or a breach of contract—they can use this insurance to recover the losses. The rise in claims notifications does not necessarily mean that deals are failing; rather, it suggests that buyers are using these policies more effectively to recover costs when issues arise.
Why Private Equity Is Leading
Private equity firms were the primary drivers of this trend in India, accounting for 92% of the insurance claims in 2025. Private equity firms often engage in highly complex, large-scale acquisitions that require strict risk management.
As the Indian corporate sector moves toward more sophisticated deal structures, these firms are increasingly relying on insurance to shield themselves from potential financial surprises. This suggests that the Indian M&A market is maturing, with insurance becoming a standard tool in deal execution rather than an optional add-on.
The Focus on Tax and Compliance
While financial statement issues are the top reason for claims across the broader Asia-Pacific region, India tells a slightly different story. Tax-related issues remained the most frequent trigger for claims in India, accounting for half of all notifications. Compliance breaches followed, representing about a third of the cases.
This trend highlights that tax and regulatory compliance are the most critical areas for investors to scrutinize during the due diligence process. The fact that tax liability claims have seen a sharp increase region-wide—with some individual payouts reaching over $75 million—shows that regulators and tax authorities are highly active, and post-deal disputes are becoming more severe.
How Investors May Read This
For investors, this rise in claims should not necessarily be viewed as a negative sign of market instability. Instead, it reflects a more transparent and formal approach to deal-making. In the past, such disputes might have led to long, drawn-out legal battles. Today, the prevalence of insurance means that these risks are being identified, quantified, and settled through insurance channels.
However, the high frequency of tax and compliance-related claims serves as a reminder of the volatility involved in corporate acquisitions. It underscores that even in well-structured deals, regulatory environments—particularly regarding taxes—can change or reveal legacy issues that create significant costs for the new owners.
What Investors Should Track
As the M&A market in India grows, investors may want to monitor a few key areas. First, look for the quality of due diligence in corporate announcements. High-profile acquisitions with weak due diligence can lead to costly surprises later, even if insurance covers some of the loss. Second, track the regulatory environment. Changes in tax laws or compliance requirements can quickly change the risk profile of past deals. Finally, observe the use of these insurance products in major deals. If a company uses insurance extensively, it may indicate a prudent approach to risk management, but it also highlights that the sector is dealing with complex, potentially high-risk environments.
