Which APAC markets are seeing significant growth in transaction risk adoption?

Question

Accepted Answer

India, South Korea, and Southeast Asia are experiencing a second wave of growth in transaction risk adoption.

The Asia Pacific region is witnessing a significant increase in the adoption of transaction risk products, with a notable second wave of growth emerging in India, South Korea, and Southeast Asia. This expansion is supported by growing underwriting capacity and wider market acceptance, leading to the integration of these insurance solutions into deal structuring and risk management practices. Standalone tax liability insurance, in particular, has become a regular feature in India and is gaining traction across South Korea, Japan, China, and Australia.
Standalone Tax Liability Insurance Gaining Momentum

Standalone tax liability insurance has evolved from a niche product to a regular component of transactions in India. Its adoption is now expanding significantly into markets such as South Korea, Japan, China, and Australia. This type of insurance is increasingly being utilised to manage specific, identified tax exposures, including issues related to capital gains tax exemptions, withholding taxes, and net operating losses.
Increased Claims Activity Reflects Market Maturation

As the adoption of transaction risk products has risen over the past decade, the Asia Pacific region has observed a steady increase in claims activity. This rise provides deeper insights into the frequency, severity, and underlying drivers of losses. While initial claims activity was concentrated in Australia and New Zealand, where the warranty and indemnity (W&I) insurance product was first introduced, a subsequent surge in growth is now evident across India, South Korea, and Southeast Asia.
High-Severity Claims and Long-Tail Risks Characterise the Region

Claims emerging from the Asia Pacific region are increasingly characterised by high-severity losses, particularly concerning large-cap and cross-border transactions, with several individual claims exceeding US$10 million. Concurrently, tax and regulatory exposures continue to be significant drivers of some of the region's largest and most complex claims. These exposures often surface several years after a deal has been completed, contributing to a pronounced long-tail risk profile.

Reading history

Hide →

This history is cleared when the page is closed.

Which APAC markets are seeing significant growth in transaction risk adoption?

Loading

Was this article helpful?

Helpful

Not helpful

Report an issue

1

0

0

Share with friends