Since the launch of the WTW M&A team in July 2022, we have seen significant developments in the Israel M&A insurance market.
The growth of Representation and Warranty Insurance (RWI) is consistent with the growth seen in US and UK deals (according to the ABA, the percentage of transactions in the US expressly referencing RWI increased from 29% in the 2017 study, to 52% in the 2019 study and to 65% in the 2021 study). While Israeli usage is still below the US and UK, usage of the product continues to increase year on year.
2021 saw record use of RWI on Israeli nexus transactions. The number of RWI policies being placed as a percentage of overall M&A in Israel continues to grow and is now contemplated on most Israeli M&A deals. This increase has been driven by greater familiarity of RWI in the Israeli market and an increase in the use of RWI on purely domestic transactions.
While 2021 was a year focused on US investment in Israel, 2022 has seen a shift in landscape and more challenging times for Israeli and global technology companies. RWI continues to play a key role and many investors view RWI as a way of increasing protection and reducing risk in the current environment.
In 2022, we have seen the Israel RWI market continue to mature, including: