How M&A Insurance Claims Are Reshaping Deal Risk Management in the MENA Region

Executive Summary

Transaction risk insurance, particularly warranty and indemnity (W&I) policies, has become a staple in mergers and acquisitions globally. In the Middle East and North Africa (MENA), where deal activity is diversifying beyond oil and gas into technology, healthcare, and logistics, the adoption of such insurance is accelerating. Aon's 2026 Global Transaction Solutions Claims Study provides a detailed look at claims trends in Asia-Pacific, but its findings carry important lessons for MENA markets. From rising large-cap claims to complex tax disputes that emerge years after closing, the study highlights the risks that accompany deal complexity. For executives and investors in MENA, understanding these dynamics is essential for pricing risk and structuring transactions.

Introduction

As MENA economies pursue ambitious diversification programs, M&A activity is expanding in both volume and complexity. Sovereign wealth funds, family offices, and international strategic buyers are increasingly targeting assets in the region, while cross-border deals into and out of MENA are growing. With this growth comes a greater need for transaction risk insurance to bridge information gaps and provide post-closing protection. Aon's study, which covers over 2,000 claims globally and more than $3 billion in recoveries, offers a benchmark for what MENA market participants can expect.

Main Analysis

Aon's data shows that in Asia-Pacific, claims activity has risen steadily over the past decade. Between 2023 and 2025, Aon secured over $26 million in claims payouts in the region, including several high-value cases. The primary triggers—disclosure failures, inaccurate financial statements, compliance breaches, and tax exposures—are universal. In MENA, similar issues are prevalent, especially in family-owned businesses where financial records may be less standardized, and regulatory frameworks can vary significantly between jurisdictions.

Standalone tax liability insurance is gaining traction in India, South Korea, and Australia, and is now being used in MENA transactions, particularly to cover capital gains tax exemptions, withholding taxes, and transfer pricing risks. The study notes that tax-related claims often take more than five years to emerge due to audit cycles, making them a long-term consideration for acquirers. In MENA, where tax regimes are evolving (e.g., introduction of VAT and corporate income taxes in some Gulf states), this becomes a material risk factor.

Sector-specific patterns are also identifiable. Consumer and retail deals face higher exposure to regulatory scrutiny and customer liabilities, while technology transactions encounter licensing and contract concentration risks. Given the rapid growth of MENA's tech startup ecosystem and the entry of global retailers, these sectors warrant careful insurance review.

Regional Impact

The implications for MENA are multifaceted:

• Economic Development: W&I insurance facilitates deal-making by reducing post-closing uncertainty, which can attract more foreign direct investment into non-oil sectors.
• Business Competitiveness: Companies that employ transaction risk insurance can offer sellers cleaner exit terms, improving their competitiveness in auctions.
• Cross-Border Trade: With MENA positioned as a hub between Asia, Europe, and Africa, cross-border M&A is rising. Claims data from Aon suggests such deals involve higher tax and regulatory complexity, making insurance more valuable.
• Private Sector Development: As family businesses seek capital or succession solutions, insurance can help address historical governance gaps.
• Capital Allocation: Institutional investors, including pension funds and sovereign wealth funds, increasingly require W&I coverage as part of their risk management protocols.

Strategic Implications

For executives and investors operating in MENA:

• Due Diligence is Paramount: Insurance does not replace due diligence but supplements it. The rise of claims underscores that undisclosed liabilities remain a key risk.
• Tax and Regulatory Risks are Long-Tail: Policies should be structured to cover potential tax disputes that may surface years later, especially as regional tax regimes evolve.
• Sector Expertise Matters: Underwriters are segmenting risks by industry. Tech, healthcare, and energy transactions each have distinct triggers that should be assessed early.
• Coverage Limits and Retention: Global trends show median payouts are rising. MENA buyers should consider higher policy limits to match deal sizes, which are increasing.

Future Outlook

Over the next 3–5 years, the use of transaction risk insurance in MENA is expected to grow, driven by:

• Economic Diversification: As governments privatize state-owned assets and court foreign investors, insurance will become standard in large transactions.
• Regulatory Harmonization: Efforts to align commercial laws across GCC countries and with global standards will reduce some risks but may also create transitional exposures.
• Digital Economy: The rise of fintech and e-commerce deals will require specialized insurance products for data privacy and cybersecurity risks.
• Capital Markets Depth: As IPOs and secondary offerings increase, pre-IPO M&A will incorporate W&I insurance to facilitate clean exits for early investors.

MENA's strategic location as a corridor for cross-border investment will also mean that global insurance trends—like rising claim values and complex tax disputes—will be mirrored in the region. The key for market participants is to stay ahead by embedding insurance into deal architecture from the start.

Conclusion

Aon's Asia-Pacific claims study offers a glimpse into the future of M&A in MENA. As the region's deal ecosystem matures, transaction risk insurance will move from a niche product to a core component of transaction planning. The data on claims frequency, size, and cause provides a valuable risk map for corporates and investors. By learning from global experience, MENA stakeholders can better navigate the complexities of modern M&A and protect their investments against long-tail liabilities.