Africa’s transactional risk market shows resilience despite economic headwinds

Spiros Fatouros

Demand for transactional risk insurance across Africa is rising rapidly, even as broader M&A activity faces pressure from global economic uncertainty, according to the 2025 Global Transactional Risk Insurance Report published by Marsh (NYSE: MRSH).

The report reveals a significant structural shift in how investors approach the continent: while macroeconomic challenges led to some transactions being put on hold in 2025, interest in risk mitigation skyrocketed. Inquiry volumes for transactional risk solutions in Africa doubled year-on-year, growing from 15 in 2024 to over 30 in 2025.

Key Africa insights

• Market concentration: South Africa continues to anchor the regional market, accounting for approximately 70% of W&I (warranty & indemnity) policies placed on the continent.
• Increased capacity: The number of insurers willing to consider African submissions grew from 10 to 17, reflecting greater international familiarity with African risks and the W&I product.
• Typical deal sizes: In South Africa, average deal sizes ranged between US$6 million and US$122 million (approx. R100 million –R2 billion).
• Regional momentum: Beyond South Africa, Marsh advised on placements across Nigeria, Uganda, Côte d’Ivoire, and Botswana, signaling a broadening of the continent’s M&A map.
• Sector leaders: Strategic investments were driven by the consumer, fintech, and digital infrastructure sectors are driving strategic investment, alongside a growing focus on renewable energy. 

"Africa’s transactional risk market is not just holding steady; it is maturing,” said Nirav Modi, Private Equity and M&A Leader, Marsh Middle East and Africa. “What we are seeing is a shift from the opportunistic use of insurance to a strategic application where it is actively enabling deals to close under uncertain conditions. Transactional risk insurance is no longer a niche product; it is becoming a core part of the dealmaking toolkit.”

Spiros Fatouros, Chief Executive Officer, Marsh Africa and South Africa, added: “Despite global economic headwinds, we continue to see steady M&A activity across Africa, particularly in high-growth sectors such as fintech, consumer, digital infrastructure and renewable energy. This sustained momentum underscores the importance of effective risk transfer, with transactional risk insurance playing an increasingly critical role in giving investors the confidence to execute in a complex environment.”

Looking ahead to 2026, deal activity in Africa is expected to remain stable, with an increased focus on infrastructure development, securing critical minerals, and food security. As familiarity with these insurance solutions grows, the market is expected to continue its maturation as a primary risk-transfer tool for both domestic and international investors.

Marsh reports significant shift in transactional risk insurance market amid record-breaking global M&A activity in 2025

After three years of declining rates, the global transactional risk insurance market turned in 2025 with primary representations and warranties (R&W) rates rising across most regions, according to a new report published today by Marsh (NYSE: MRSH), a global leader in risk, reinsurance and capital, people and investments, and management consulting. The pricing shift comes amid increased M&A deal volume and rising claim activity.

The 2025 Global Transactional Risk Insurance Report found that North America experienced the most pronounced pricing increase, with average primary layer R&W premium rates increasing 16% year-over-year, compared with a 14% decline in 2024. Similarly, Asia recorded an 8% year-over-year increase in premium rates in 2025 compared to a 24% average decline in 2024.

This upward pricing trend comes amid record-high global M&A deal values, which reached nearly $5 trillion in 2025. Deal values grew materially faster (up 37%) versus deal count, which was up 12% over 2024. Volume growth was fueled by a sharp increase in mega deals, including 70 transactions over $10 billion—an 81% jump year-over-year—and 617 deals exceeding $1 billion, the report shows.

Amid higher deal count and deal values, global transactional risk insurance claims frequency and severity rose in 2025, according to the report. The UK hit historic notification and payout levels, while Europe’s claims doubled and Asia saw sharp increases. North America’s notifications dipped slightly, but total loss payments reached a record high.

Among other key findings from the report: Marsh Risk placed a record $91.6 billion in transactional risk insurance limits globally in 2025—a 34% increase—across more than 3,800 policies and nearly 1,800 unique transactions; and the number of tax insurance policies placed by Marsh Risk in North America increased 82% in 2025, while Europe’s tax insurance policy count grew over 50% and insured limits more than doubled year-over-year.

For the third consecutive year, Marsh Risk completed a greater share of transactional risk insurance programs for corporate and strategic insureds (53%) than for private equity firms (47%), signaling a sustained change in buyer behavior.

“2025 marked a pivotal year with rising premiums and record placements supporting increased M&A activity,” said Craig Schioppo, Global Transactional Risk Insurance Practice Leader, Marsh Risk. “Deal activity so far in 2026 is robust with high demand for transactional risk solutions, as the insurance market continues to tighten. We remain committed to delivering innovative risk solutions that help our clients navigate this dynamic market with confidence.”