Year in review report
Marsh, a business of Marsh McLennan, has released its Transactional risk insurance 2024: Year in review report.
A local analysis is below, along with key commentary from local Marsh subject matter experts.
Key findings from the GCC and specifically, United Arab Emirates (UAE) market include:
- Sovereign wealth funds (SWFs), acting directly and indirectly, have significantly contributed to sustaining deal activity in the GCC region. 2024 marked the highest level of global dealmaking by SWFs in over a decade.
- The UAE leads in terms of deal volumes with 131 reported M&A completions during the last year; and the aggregate value of these transactions was US$19.7bn.
- The primary sectors for M&A deals included technology (22%), industrials (15%), business services (18%), consumer & retail (13%), and energy and natural resources (8%).
- In 2024, Marsh placed over US$$550 million of insurance capacity relating to closed investments in the UAE and Saudi Arabia alone, with an aggregate deal value of US$2.25 billion and median deal size of US$450 million.
- Inbound investment amounted to 25% of transactions, highlighting the increasing prominence of foreign direct investment in the GCC region
- There has been a 78% increase in demand for M&A insurance, indicating a growing maturity in regional transactions and a substantial rise in the number of insurers willing to underwrite these deals, resulting in lower costs and expanded coverage.
For the Middle East the report reveals a 78% surge in demand for M&A insurance in the GCC region. With global M&A activity expected to gain momentum, the region is poised to play a crucial role in emerging investment sectors, with M&A insurance anticipated to remain a vital tool for mitigating risks and facilitating transactions in a dynamic market.
This significant increase underscores the growing maturity of regional transactions and highlights the UAE’s position as a leading hub for M&A activity, with 131 reported deal completions valued at US$19.7 billion in 2024.
Across the Middle East and Africa (MEA) region, the reported aggregate value of completed transactions in 2024, excluding outbound investment, exceeded US$45 billion across more than 480 transactions. Although the reported aggregate number of deals in the region fell by 13% compared to the prior year, 2024 saw a return of larger transactions, with aggregate completed deal value in the region exceeding US$33 billion, a 42% increase over the prior year.
This activity, combined with innovation in the transactional risk insurance market and historically low placement costs, led to robust use of M&A insurance across the regional investment landscape.
Luke Sutton, Head of Transactional Risk, Middle East and Africa, Marsh said, “In the region, the UAE remains at the forefront of M&A activity, driven by economic diversification initiatives and a robust investment landscape. The year-on-year growth in the application of transactional risk insurance to UAE deals is a by-product of the increasing complexity of local transactions, and sophistication and risk-awareness of buyers, sellers, management teams and advisors. We anticipate that the growing demand for insurance solutions, particularly in sectors like technology, consumer products, and energy, will continue to drive opportunities in the market as the economy further diversifies and matures. Marsh is working closely with insurers to provide innovative risk transfer solutions to help deal makers capitalise on the plentiful opportunities in the UAE market”
Nirav Modi, Private Equity and Mergers & Acquisition Services Practice Leader, Middle East & Africa, Marsh said: “We have witnessed a shift towards more inbound investment interest into the Middle East region from private capital players over the last two years. The mix of domestic versus inbound investments has evolved significantly towards a 50/50 split as sovereign wealth funds are increasingly looking at international investments with strategic partnerships.
“Private equity funds are significant players in the M&A environment and their presence has influenced the necessity for insurance in transactions, as it provides a cleaner exit strategy by mitigating potential claims against sellers. Therefore, while historically, many deals were completed without insurance due to limited insurer appetite and perceived high costs; in the last two years, there has been a significant increase in requests for exploring insurance solutions on deals within and relating to Middle East.”
Click here to learn more and download this year’s report.