How do APAC claims trends compare to global transaction risk patterns?

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APAC Claims Trends Align with Global Transaction Risk Patterns

Asia Pacific (APAC) transaction risk claims trends are now broadly mirroring global patterns. Common sources of loss in APAC, such as disclosure issues, inaccuracies in financial statements, compliance breaches, and tax-related exposures, are consistent with those observed worldwide. This alignment signifies a maturation of the transaction risk market in the region, with claims experience increasingly reflecting broader international trends.
Disclosure, Financial, and Compliance Issues Drive Claims

Across the APAC region, the most frequent drivers of claims remain consistent with global trends. These typically involve issues related to undisclosed or misrepresented material contracts and liabilities, discrepancies between reported financial figures and underlying performance, and instances of regulatory or licensing non-compliance, particularly within heavily regulated sectors. Tax disputes, encompassing areas like transfer pricing, customs duties, and withholding obligations, also contribute significantly to claim volumes.
High-Severity and Long-Tail Risks Characterize APAC Claims

Claims in the APAC region are increasingly marked by high severity, especially in relation to large-cap and cross-border transactions, with several individual claims exceeding US$10 million. A notable aspect of these claims is their long-tail nature, often driven by tax and regulatory exposures that emerge several years after deal completion. While operational and disclosure-related issues may surface within the first year post-transaction, tax-related claims can be notified more than five years after policy inception, reflecting the timelines of audits and enforcement actions.
Tax and Regulatory Exposures Remain Significant Claim Catalysts

Tax and regulatory exposures are identified as key factors behind some of the region's largest and most complex claims. These issues frequently surface years after a deal has been concluded, contributing to a pronounced long-tail risk profile. This trend underscores the importance of standalone tax liability insurance, which is becoming a standard feature in transactions in countries like India and is gaining traction across South Korea, Japan, China, and Australia to manage identified tax exposures.

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How do APAC claims trends compare to global transaction risk patterns?

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