The evolving M&A Insurance industry is increasingly capable to provide added value to the processes. In a conversation with Bernard Poncin and Paul Schouten from Aon’s Belgian M&A team, we explore how these highly specialized insurance products are helping buyers and sellers manage uncertainty, protect value, and accelerate deal timelines.
When it comes to mergers and acquisitions (M&A), managing risk is critical – and insurance is playing an increasingly important role.
In a conversation with the Belgian M&A Community, Bernard Poncin and Paul Schouten, two specialists from Aon's Mergers and Acquisitions and Transaction Solutions team, share their perspectives on how to spot red flags and how insurance products can meet the demands of today's complex deal environment.
Structuring insurance solutions for private equity exits and public offerings
Bernard Poncin, Head of Financial Lines Continental Europe, is responsible for helping corporate clients during Capital Market transactions and Private Equity clients in managing its professional risks. Bernard brings over three decades of experience in financial lines insurance, such as D&O insurance, professional indemnity insurance, fraud, and POSI (Public Offerings of Securities Insurance). In his current role at Aon, he focuses on directors' liability and related products for private equity clients. He describes D&O – Directors and Officers insurance – as the ‘starship’ of financial lines, forming the core around which other products are built.
Poncin explains that his work centers largely around transactions involving private equity firms, especially during ‘exit’ scenarios such as dual track processes, private sales, or stock exchange listings.
IPO’s and equity raisings are clearly back on the table. “We are proud to have been part of the successful equity raising by Elia-Group. Raising 2 billion euros in current markets provides them a sound base to fund the ambitious investment program of more than 30bn. This transaction marks the largest primary offering in Europe to date and contributes to maintaining a future proof energy infrastructure in Belgium.” Listings require a complex insurance structure. "We insure separately the administrative responsibility, the membership responsibility, the responsibility of the selling and controlling shareholders", he says. “These responsibilities are bundled into a single policy that respects varying statute of limitation periods – which can range from six to twelve years in jurisdictions like Germany.”
In a public offering, insurers must consider not only the liability arising from the prospectus itself but also related documents, such as marketing and investor presentations. "Everything that concerns the company going public needs coverage”, Poncin explains. This is relevant as investors globally become more vocal.
In addition, a new D&O policy must be set up for the newly public company. If a company opts instead for a private sale, Poncin’s team ensures that any transactional risks are addressed within existing D&O structures, or arranges new policies when needed.
How tax insurance transfers fiscal risk
While Poncin focuses on D&O and liability issues, Paul Schouten brings a tax perspective to the AMATS team. A former fiscal attorney, specialized in the fiscal aspects of M&A transactions joined Aon more than two years ago. He focuses on tax assurance solutions, a relatively new but rapidly growing segment of the M&A insurance market. “The beauty of our team is that we can help the client during decisive moments and by combining our expertise, we can guide the clients to the most optimal solutions to manage identified risks that often come to the surface when preparing for an important transaction”
"Warranty & Indemnity (W&I) insurance provides cover for unknown and unexpected risks in a transaction", Schouten observes. "You have done your due diligence and yet you don't know what might pop-up post closing. In contrast, tax insurance addresses risks that are already identified. Such risks could range from very theoretical concerns to issues already being audited by the tax authorities."
Traditionally, buyers confronted with identified tax risks had few good options: negotiate a price reduction, set up an escrow, or seek a tax ruling from authorities. Yet, as Schouten points out, "Belgian tax authorities are less and less accessible, they are taking longer and they have become more and more reluctant to do rulings." Tax insurance now offers a compelling alternative, transferring identified risks to an insurer in exchange for a premium.
"Belgian tax authorities are less and less accessible, they are taking longer and they have become more and more reluctant to do rulings."
"It might sound very abstract, but it's not really", Schouten emphasizes. “Tax law is full of grey areas, where even the best tax advisor in Belgium will not give 100 percent certainty on a tax position. This inherent uncertainty creates a need for insurance solutions that can support deals and give buyers and sellers greater peace of mind.”
The risk of interest deductions
Tax exposures are a major source of risk in M&A deals – and often hard to eliminate completely. Schouten gives a typical example involving interest deductions. "If you acquire a company in 2025 and you do your due diligence, you for example see that the target has deducted interest from its taxable income", Schouten says. “While interest deductions lower taxable income and are generally allowed, restrictions can apply. Even after careful review, the risk remains."
Once a buyer acquires the shares, they become responsible for any future claims by tax authorities. "You become the point of contact as a buyer for the tax authorities for the next five, six, seven years", Schouten explains, adding that this exposure can lead to both financial liabilities and considerable hassle. Private equity firms frequently face these risks, given their common use of debt and management-incentive structures. Dividend withholding tax is another frequent issue, especially with cross-border payments. Poncin adds: “in talks with Private Equity when we prepare for an IPO, parties always want to de-risk its balance sheet to prevent surprises shortly after listing. So when I’m involved in limiting the director’s liability we often also try to mitigate the impact of “known risks” like tax and we often provide benchmarking data to align the management incentive plans with market practice”
Managing risks in listings, delistings, and recapitalizations
In capital markets transactions, companies face heightened liability risks – whether they are listing, delisting, or recapitalizing. Aon typically acts for the company, or issuer, ensuring protection against claims related to misstatements, false promises, or unmet expectations outlined in the prospectus.
Bernard Poncin explains that these three activities – "listing, delisting and recapitalization" – have been the dominant trends in 2025. Whilst we have a healthy pipeline with IPO’s, we also see investors actively looking at attractive delisting opportunities to benefit from the current volatile stock markets.”
Delistings bring particular challenges. "There is the necessity to insure the directors' liability", Poncin says. “A key risk arises from conflicts between controlling and minority shareholders. The controlling shareholder is going to try to get the rest of the company at an attractive price, while minority shareholders seek the highest possible value. In between, you've got the board of directors, who are supposed to work in the best interest of both the shareholders and other stakeholders and the interests might be completely different."
“A key risk in delistings arises from conflicts between controlling and minority shareholders."
Another risk is the asymmetry of information. "The majority shareholders may have much more information than the minority shareholders", Poncin notes. This creates the potential for future claims if minority shareholders feel misled. To address these exposures, Aon offers specialized insurance solutions, including directors' liability coverage and, in some cases, synthetic W&I insurance.
New trends in M&A risk and insurance appetite
In recent years, the landscape for M&A risk insurance has evolved significantly, especially regarding the types of risks insurers are willing to cover.
Paul Schouten observes a clear shift: "A few years ago they were less interested in more difficult risks", he explains. “For instance, insurers previously avoided fiscal risks that involved complex legal analysis or were under investigation by tax authorities. Now that the product is maturing, we see an increased appetite with insurers for more difficult risks.
Bernard Poncin confirms this trend. "In terms of risks, they are the same liabilities", he observes. However, new factors like ESG regulations and cyber responsibilities are adding extra layers to existing exposures. Encouragingly, Poncin notes, "what we see in the last 12 to 18 months is that the market has much more appetite to cover these risks. It is an interesting market for the insurance buyers with broader coverage options and better pricing now available.”
Identifying red flags and managing claims after the deal
One of the critical stages during M&A due diligence is spotting the so-called ‘red flags’ that could derail a deal. Paul Schouten explains how risks are categorized: "If it's green, it's probably low risk and theoretical. Orange is medium. Red – that's something you have to look at carefully." No matter the type of tax – VAT, transfer tax, dividend tax – the real issue is the probability of problems emerging later.
Almost every tax risk can be insured, but pricing depends heavily on the quality of the analysis and how it's presented to insurers. "The probability that a risk will be manifested and its impact – that’s what buyers focus on", Schouten says. "Red flags make them nervous."
For directors' liability, certain industries and structures bring heightened risks. "Sectors like for example pharma, life sciences and other highly regulated sectors together with listing venue and the amount of US exposure – all create potentially increased exposures that need close attention," Bernard Poncin points out.
Dealing with claims after an acquisition is another key part of Aon’s role. "Relevant communication with the insurer is crucial", Schouten explains. Insurers generally stay in the background, but when real financial damage or settlements are involved, their approval is needed. "Our role doesn't end with the brokerage and placement", he emphasizes. "We stay involved and have our dedicated Claims Handling team that helps clients to realize the best possible result."
Building a comprehensive risk management team for M&A
Managing risks in M&A transactions often goes far beyond tax or liability issues. As Bernard Poncin explained, Aon’s approach is to build customized teams of specialists to address a wide range of challenges. "The way we are organized, we have a European team. Our Belgium team is part of a Northern European set-up so that we have direct access to specialists that works for Benelux and the Nordics. We have a quite diverse, multilingual team of different nationalities and specialists. That helps in finding solutions to unique client situations", he says.
Depending on the situation, clients might face multiple types of risks simultaneously – from tax questions to human capital challenges to cyber threats. For example, when a private company is acquired by a listed company, differences in pay incentive structures can cause key employees to leave. "They often ask, can you do an analysis on the future pay grade that we should have in this company to avoid people leaving?", Poncin notes.
Cybersecurity is another critical area, especially when a company is preparing for a stock exchange listing. ”When hackers know that a company is preparing for a major IPO or capital raise, they understand the company is under intense pressure and working against tight deadlines. Hackers recognize this as the perfect moment to launch an attack”, says Poncin.
"Hackers recognize a major IPO or capital raise as the perfect moment to launch an attack.”
An IPO candidate simply cannot afford to be confronted with a hacking incident. Aon can help the company assess its cyber security vulnerabilities and check for any signs that hackers my already have accessed its systems. "An example of our integrated approach paying off and helping clients to strengthen its defences ahead of a Capital Markets event”, says Poncin.
In each case, Aon builds a team based on the client’s needs, combining expertise in areas like W&I insurance, directors' liability, tax, human capital, and cyber risk. "The first approach actually is having the picture of what is needed here", Poncin explains. "Then we would set up the team, depending on geographic location, language expectations, and specialty."
Having a single, coordinated team manage the risk analysis and insurance placement offers clear advantages. "You don't have three different companies that order your positions", Schouten says. "You have everything in a sort of one-stop shop, and that is, in my opinion, always better for the communication and for the end product."
Conclusion
Looking ahead at the M&A landscape for 2025, both Schouten and Poncin agree that while geopolitical tensions remain, the M&A market is adapting. "I think business investors are realizing that this unrest is simply the new reality", Schouten says. "And they will continue with their plans."
Poncin concludes on a pragmatic note: "Investors still have obligations – capital must be deployed. We'll likely see more listings, especially from well-known companies bringing subsidiaries to market. Private equity, in particular, can't afford to sit still."
In this complex and shifting environment, Aon’s comprehensive, collaborative approach helps clients navigate M&A risks with confidence – whatever the future may bring.
