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Aon Launches Transaction Liability Practice, Helps Clients Navigate Transaction Risks and M&A Issues

Posted on 01 Mar 2013 by Neilson

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AonAon Risk Solutions, the global risk management business of Aon, announced today that it has formed Aon Risk Solutions' Transaction Liability Practice in order to capitalize on the exponential growth in the transaction liability insurance market.

While Aon has been servicing this market and placing transaction related insurance products for more than a decade, the dedicated practice will leverage existing expertise and will be complimented with additional resources to support the complex nature of these placements. The practice will provide comprehensive transaction liability solutions to organizations such as private equity firms, organizations focused on mergers and acquisitions as well as clients who are seeking innovative solutions for contingent liability exposures that impair their balance sheet or impede a potential transaction.

"Transaction liability insurance products have become increasingly important as firms more aggressively focus on strategic acquisitions and divestures of non-core," said Tom Fitzgerald, CEO of Aon Risk Solutions' U.S. Retail operations. "The ability to substitute insurance capital to address deal risks including representations and warranties, tax liabilities, litigation and other contingent risk can increase the probability of a deal closing. Given the increasing level of sophistication of these solutions, we expect adoption to increase significantly in the coming years."

In addition to delivering best-in-class transaction risk solutions by working directly with existing markets, the Transaction Liability Practice will also focus on developing new products to further expand Aon's suite of solutions and continue to broaden the transactional risks that can be addressed with insurance capital.

"We estimate more than $6 billion of transaction liability limits were purchased globally in 2012," said Michael Schoenbach, managing director and practice leader of the Transaction Liability Practice. "We believe this was attributable to a combination of lower cost, enhanced coverage, favorable performance of the products and better awareness of how to utilize them strategically."

The practice will leverage a coordinated, global team that pulls together Aon's diverse group of professionals, tapping into the expertise of attorneys, CPAs, former underwriters and financial services professionals. Gary Blitz and Nancy Rodrigues will be brought onto a unified platform with Aon's transaction brokers Matt Heinz and Allyson Coyne. Aon has plans to significantly expand the team to meet continuing demand.