Torys Quarterly Piece on Rep and Warranty Insurance Runs in PE Hub Canada

February 06, 2018

A Torys-authored comprehensive exploration of some of the key representation and warranty insurance trends for 2018 has been picked up by PE Hub Canada.

The original piece—authored by partner Stefan Stauder and Meghan McKeever—appeared as a part of the Q1 edition of Torys Quarterly.

PE Hub Canada ran the story, which focusses on the key trends from the last 12 months that are worth keeping an eye on. A small excerpt from the article is below.

Better pricing

In just the last 12 months, premiums on the heart-of-the-market policies, those underwriting deals with $100 million to $500 million enterprise value, have dropped to 3% to 3.4% of EV. This represents a meaningful price cut from the previous 3.25% to 3.75% range.

Even better pricing is available where the underwriting market views the deal as a good risk. In those cases, premiums can be as low as 2.5% of EV.

Not surprisingly, increased competition by new market entrants in the United States and Canada is the key driver for the drop in pricing, as newcomers like Blue Chip, XL Catlin and Euclid challenge the established underwriters like AIG and Ambridge.  

The Q1 edition of the Torys Quarterly includes articles discussing market trends, important rulings and other developments that will loom large over long-term strategy in the year ahead.


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