Aon launches new Warranty & Indemnity insurance solution for Real Estate Sector
Sydney, 29 April 2019 - Aon (NYSE:AON), the leading global professional services firm providing a broad range of risk, retirement and health solutions, has developed a bespoke Warranty & Indemnity (W&I) Insurance product, Aon Real Estate Solution (ARES), tailored to address the specific risks presented in the acquisition and disposal of real estate.
The new solution captures key policy features designed specifically for real estate transactions to achieve both a clean seller exit, as well as fulsome protection for buyers.
The key features of the bespoke Aon Real Estate Solution are:
- Lower premiums
- Lower deductibles; nil deductibles for certain types of claims
- Coverage up to full purchase price for title warranties at market competitive premiums
- Comprehensive coverage, including the ability to provide bespoke cover for identified exposures
- Stapled W&I insurance to support competitive auctions and portfolio asset sales
- Speed of execution through streamlined underwriting approach
Aon’s goal is for the W&I insurance policy to go ‘back to back’ with the underlying purchase agreement. Aon’s innovative approach means bespoke solutions can be designed for identified risks, such as environmental protection under a stand-alone environmental policy.
Where a portfolio of assets is taken to market, Aon can structure a solution whereby it is able to leverage cost efficiencies to structure a W&I insurance program for the entire portfolio. This approach will generate premium and process efficiencies, particularly where minimum premiums would apply for the sale of a single asset.
Sam Thomas, Client Director at Aon, said: “We are excited to have developed this market leading solution which is based on an understanding that risks in the real estate transactions sector are distinct from other transactions and require a fundamentally different approach. The key features of this product will enable sellers to achieve a clean exit from real estate investments, whilst at the same time providing buyers with customary deal protection.”
Mr Thomas added, “Recognising the extremely robust title system in the Australian and NZ market, we have been able to structure very efficient rates for title insurance at rates which have not been available through traditional W&I insurers.
“We expect that warranty and indemnity insurance will become increasingly popular in the AUNZ real estate sector and beyond. There has been increased use of W&I insurance in real estate deals which has widened its exposure to a range of interested parties including Asia Pacific corporates, PE funds and sovereign wealth funds. The awareness of such a product by real estate investors will result in increased uptake and is set to become an accepted feature of the deal landscape.”
Find out more about Aon's full Mergers & Acquisitions and Transaction Solutions offering here.
Aon plc (NYSE:AON) is a leading global provider of risk management, insurance brokerage and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 69,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative risk and people solutions. For further information on our capabilities and to learn how we empower results for clients, please visit: http://aon.mediaroom.com/