Marsh says insurance issues faced by private equity groups seeking to buy public companies have prompted it to introduce a warranty and indemnity (W&I) product for such deals.

“W&I Insurance has traditionally serviced as a facilitative tool for private company transactions,” Chris McDermott, the Pacific Practice Leader for Marsh’s private equity and mergers and acquisition team, said.

“We saw a real opportunity to extend the benefits of W&I to transactions involving listed businesses and have already seen significant interest in this product from private equity firms scoping public targets.”

The number of hostile bids by cashed-up private equity groups is increasing and businesses are seeking to enhance their negotiating position, protect their purchase price and improve certainty in public to private deals, Marsh says.

Public to private ownership deals represented about one in 12 transactions last year, and activity this year is pointing to a higher relative volume of such deals.

Marsh’s W&I product is deployed through insurance partners AIG, Ironshore, Tokio Marine subsidiary HCC and Bond & Credit Co.