The representations and warranties (R&W) insurance market is experiencing a shift in 2025, giving brokers more opportunities to secure broader coverage for their clients. This change comes at a time when claim volumes are rising, putting pressure on insurers to balance losses with lower premiums.
Emily Maier, a senior vice president at Woodruff Sawyer, explains that in a softer market, insurers are more willing to cover a wider range of deals. This flexibility allows brokers to find coverage for companies that have previously faced challenges in securing insurance. However, as the number of claims increases, the pressure on premiums remains a significant concern.
Maier points out that while the volume of claims is on the rise, particularly in middle market transactions, there is still downward pressure on premiums. This creates a tension between the coverage clients want and what underwriters can realistically charge.
Claims are evolving too. While financial breaches continue to be the most common reason for claims, there is a noticeable rise in disputes related to compliance with laws, especially in regulated industries. Maier notes that the handling of claims is becoming a critical topic for clients. The quality of claims handling, whether done in-house or outsourced, is now a focus of discussions between clients and their brokers.
In addition to R&W insurance, the tax and contingency insurance markets are developing at different rates. Green energy tax credits are still the main focus, but more niche risks are gradually gaining attention. Maier mentions that only a few markets are willing to cover complex tax risks, which can become very expensive once audit activity begins.
On the other hand, contingent litigation risks are seeing a pullback. After several significant losses, many underwriters are reassessing how these risks are priced, indicating that this market is still in its early stages.
As competition in the transactional insurance space increases, brokers are finding that their value goes beyond just pricing. Private equity firms now view R&W insurance as essential. Brokers who can provide real expertise—beyond merely acting as intermediaries—are likely to stand out. Maier warns that brokers who charge excessive fees for additional services risk damaging their relationships with clients.
Looking ahead, Maier anticipates that as deal flow increases and premiums begin to rise, the tension between coverage and cost may ease. However, the importance of expertise, advocacy in claims, and fair pricing will be key factors that differentiate successful brokers from those who struggle in this changing market.