Warranty & Indemnity (W&I) insurance has become an increasingly valuable tool in African mergers and acquisitions (M&A) transactions, helping buyers and sellers shift risk to a reliable creditworthy third-party insurer, simplify warranty negotiations and achieve cleaner exits. In Africa’s fast-evolving M&A space, transactional risk mitigation has become vital. Simla Ramdayal, Director of the M&A W&I team at WTW South Africa explains how how this insurance product is reshaping deal-making in the region in this Q&A.
With over a decade of corporate M&A experience, Simla is an admitted attorney in both South Africa and England & Wales, is considered to be a specialist in corporate, commercial and regulatory law, and was recognised as a Rising Star by IFLR1000 in 2017. Simla has extensive knowledge of W&I insurance in Africa and her insights shed light on both the growth of W&I insurance and best practices for dealmakers in today’s dynamic environment. Simla co-leads an experienced M&A insurance team in Johannesburg, South Africa.
Simla Ramdayal, Director M&A W&I Team, WTW South Africa
Have you seen a noticeable shift in demand for W&I insurance in South Africa? If so, what's driving it?
Absolutely. Since WTW (previously RCA) started working on W&I insurance in the region approximately 10 years ago and more recently we have seen a significant uptake in W&I insurance in the South African and broader Africa M&A space. Initially, it was primarily driven by private equity investors seeking clean exits. However, today more corporates and strategic buyers and sellers are recognising the value that W&I insurance brings to their transaction.
Have you observed any recent changes in W&I trends or policy pricing?
Given the increased competition in the South African and broader African M&A market, we’ve seen new global M&A insurer entrants into these markets. This increased competition contributed to more competitive pricing, favourable retention options and an increased openness by insurers to consider offering deal enhancements in regions which are more common in European markets, such as knowledge qualifier scrapes, data room scrapes and new breach cover. This increased competition, together with a growing familiarity with the African market, have also contributed to insurers showing an increasing appetite to consider coverage for diverse industry sectors and operations in previously ‘unpalatable’ African jurisdictions, including Uganda, Mozambique and Rwanda – subject, as always, to appropriate due diligence.
Which sectors are currently showing the most interest in W&I, and why?
Renewable energy, fintech, healthcare and consumer industries are all showing strong activity in the M&A space in 2025. Some of these industries are highly regulated, which increases the need for thorough due diligence and clear risk allocation. W&I insurance helps to provide comfort around risk allocation and warranties, particularly in deals involving regulatory compliance and tax exposures.
What advice do you give sellers or their advisors to prepare for a smooth underwriting process?
Preparation is key. We always advise that you engage early with WTW so that we can advise you on the W&I insurance process to avoid or limit any potential pitfalls and to structure and implement practical solutions early on. With the largest dedicated M&A insurance team in Africa, WTW is a proud key player in the W&I insurance space bringing years of experience in the region. With a wealth of experience across the African region, the WTW team provides valuable advice on a wide range of transaction risk strategies, solutions, indicative pricing and expected coverage positions. WTW is also one of the few brokers in Africa with a dedicated in-house M&A claims expert, ensuring that we can assist you with your W&I insurance needs from policy structuring to claims resolution.
It is also important to ensure that the due diligence undertaken on a transaction is comprehensive and covers the subject matter of warranties and considers all major risk areas, including tax, legal, financial and regulatory matters.
How important is the quality and structure of the data room in facilitating underwriting?
A robust, well-documented virtual data room assists with smoother underwriting processes with W&I insurers. A well-organised and structured data room not only speeds up the due diligence process, but this also helps underwriters assess risk more accurately. This is where platforms like Ansarada really shine. Their intuitive interface, built-in workflows and clear folder structures make it easier for all parties to navigate and extract the necessary information efficiently. More importantly, it supports real-time collaboration between all parties involved. Maintaining a comprehensive Q&A record and digital audit trail is also essential, and Ansarada’s automated Q&A features and robust digital audit tracking are helpful in this regard.
What are some common misconceptions about W&I insurance among dealmakers?
One misconception is that W&I insurance replaces due diligence. W&I insurers require thorough due diligence and robust disclosures to underwrite the policy. Another is that it’s only suitable for large-cap deals, but in reality, we've placed successful W&I policies for mid-market transactions too. With more W&I insurers active in Africa, competition has improved pricing and accessibility.
Final thoughts?
W&I insurance is no longer a "nice to have"— it’s becoming a deal enabler, particularly in competitive or high-value transactions. But to unlock its full value, both buyers and sellers must invest in proper due diligence, engage experienced advisors in the region and make full use of technology like Ansarada’s virtual data rooms to streamline the process. The South African M&A market is maturing rapidly, and with that maturity comes enhanced opportunities for enhanced deal execution.
