W&I Insurance Claims Costs Rise 44% in Latest Year
Dealmakers using representations and warranties insurance should review current policy terms as carriers face higher loss severity.
Updated on Nov. 3, 2026 in Corporate Finance
Euclid Transactional, a New York-headquartered managing general agent for transactional liability insurance, released its fourth annual Global W&I Claims Study. Carriers paid $518 million on 255 W&I claims in the latest 12-month period, a 44% rise in aggregate loss paid versus the prior period, with implications for underwriters and deal parties in representations and warranties insurance markets.
Why it matters
Pricing softened sharply in 2022 to 2024 as average retentions also kept falling, and the study finds policies written in 2023 and 2024 are expected to be unprofitable in North America. Higher claim volume and severity are the pressure points that shape how carriers price and structure future deals.
Carriers paid $1.686 billion across 8,502 transactions since 2016, with $518 million paid on 255 claims in the latest 12-month period. North American RWI rates fell from 5.73% in Q1 2022 to 2.65% by mid-2024, while EMEA claim notices grew from 20 in 2019 to 222.
The players
Euclid Transactional
A New York-based managing general agent specializing in transactional liability insurance, with carriers that have paid $1.686 billion in claims since 2016.
Nexus Underwriting
A transactional liability underwriter that withdrew from the representations and warranties insurance market in October 2024.
The details
Representations and warranties insurance covers losses from breaches of deal warranties, and the study shows the claims cost is concentrated in large losses. Nearly 90% of loss paid arises from claims exceeding 1% of enterprise value, and payments of $20 million or more made up 54% of loss paid in the latest period. In EMEA, financial statements claims account for 13% of notices but drive 58% of total loss paid, meaning a small number of claim types carries most of the cost.
Timeline
Q1 2022: North American RWI rates peaked at 5.73%.
Q3 2022: EMEA RWI rates peaked at 2.11%.
Mid-2024: North American RWI rates fell to 2.65%.
October 2024: Nexus Underwriting withdrew from W&I.
2023 and 2024: Policies written in these years are expected to be unprofitable in North America.
Market Landscape
Representations and warranties insurance pricing fell through 2022 to 2024 in both North America and EMEA, even as claim volume and severity increased. The study projects that the market's next decade will be defined by fewer underwriters with greater scale and better data, following the exit of Nexus Underwriting in October 2024.
Deal teams and buyers should expect W&I premiums and retentions to reflect the pressure of rising claims, even as pricing has been soft. Dealmakers in North America and EMEA should check with their insurance brokers and transaction counsel on how current carrier appetite affects policy terms.
The takeaway
Pricing softness in 2022 to 2024 has coincided with rising loss severity, so the carrier appetite for future W&I deals may tighten as the market consolidates. Deal parties should ask their brokers and counsel to review current policy terms and retentions before committing to a transaction timeline.
Further reading
For broader context on how deal risk is priced and structured, explore Corporate Finance coverage.
