b'MERGERS & ACQUISITIONS|TRANSACTIONAL LIABILITY INSURANCECoverageGiven this continued record-breaking issuance, another driver of the pricing and coverage items At the same time pricing increased across thenoted above is a supply/demand imbalance for market, coverage terms also evolvedagain, incoverage in the market. A consequence of this favor of the insurers in a reversal of the marketdynamic was a continued flow of new brokers and trend over the past several years. Many insurersmarkets in this space, including US arms of non-US adjusted their risk tolerances throughout the yearinsurers and MGAs/MGUs supported by PE or other and reflected these in heightened underwritinginstitutional investors. standards, increased exclusions and more widespread deemed revisions to representationsLooking forwardin the policy. On this last point, a trend that had long been associated with non-US markets TLI has long established itself as a mainstay in the representations red pencil or theM&A market and has shown resilience in adapting representations spreadsheet, which modifiesalongside the broader M&A market during the representations (often by narrowing or reducingpandemic. At the same time, it remains too soon to their breadth) in a transaction agreement fortell whether the trend reversals in pricing and purposes of the TLI policyhas found its way intocoverage of the past twelve months will have a an increasing number of coverage quotes andlasting impact on the enthusiasm for TLI across the often the policies themselves.private M&A market. That said, US underwriters have not taken a uniform approach these exclusions. In previous years it wasUK and Europe not uncommon for insurers to compete largely on price, since coverage options and the scope of (relatively few) exclusions were relatively uniform.CorporateParticularly in the last six months of 2021 pricingM&A had an extraordinary year in 2021 with deal spreads have expanded alongside a wider variationvolumes and deal values increasing hugely from the in coverage positions.prior years. Green shoots of recovery in the M&A market were first evident towards the end of 2020, More on the Market which finished more strongly than some had Numerous market studies by brokers and insurersanticipated. This set the scene for 2021, which noted TLI issuance was at record-high levels inmarked an explosion in M&A, even across sectors the fourth quarter of 2021. This activity reflectedlike hospitality, retail and travel, which had been use of TLI in deals across a broad range ofshunned in the midst of the pandemic. It is valuations and industries.estimated that global M&A activity surpassed US$5 trillion for the first time, with PE deals accounting for an estimated US$1 trillion of this figure.36|Global Insurance Industry Year in Review 2021'