NU Online News Service, Oct. 7, 2:30 p.m.EDT

While insurance for merger and acquisition (M&A) risks iscommonplace in the U.S. and Europe, Asia is just beginning to usesimilar risk transfer strategies for financial transactions, anexecutive with insurance broker Marsh said.

The observation came as executives from four subsidiaries of NewYork-based Marsh & McLennan Companies, the parent company ofMarsh, held a press briefing today to discuss the changing M&Alandscape.

Bill Trent, partner in the corporate finance and restructuringpractice of Oliver Wyman, said the M&A environment is driven incyclical patterns mirroring current economic activity. At itsheight in 2007, M&A investments had grown to $4 trillion fueledby cheap credit, stock market gains and overly optimisticmanagement.

Although that came crashing down with the recession, drivinginvestment activity to $1 trillion over the past 12 months, thatfigure remains more than double what it was 20 years ago, henoted.

Such activity produces risk, noted Karen Beldy Torborg, managingdirector of Marsh and global leader of the firm's private equityand M&A practice. To understand the extent of these risks andhow to shield the buyer from exposures, executives have to performdue diligence to understand what their future liabilities could beand what their collateral requirements are to finance the deal andinsurance advisors are becoming an integral part of theprocess.

Ms. Torborg said this is especially true for distressed dealsthat could open exposures for environmental liabilities andworkers' compensation expenses if the acquired company wasdownsized through lay-offs.

The whole point of this exercise, she explained, is to "helpthese investors avoid unwanted surprises."

In parts of Asia, where M&A activity is growing, the use ofrisk management advisors to research deal risk and apply risktransfer solutions to problems, remains relatively new.

Globally, the primary transactional solutions, she noted, arerepresentation and warranty insurance and contingent tax andenvironmental coverage. Insurers are willing to deploy capital tocover these risks.

Ms. Torborg said that while business leaders in parts of Asiahave been aware of risk management advisors, what is growing is theamount of time that risk advisors are spending on due diligence.Ms. Torborg pointed out that one of the primary challenges forclients is making certain they have "consistent coverage across allassets." This is especially true for real estate investors makingcertain they have catastrophe coverage across all theirholdings.

Mr. Trent noted Asia has become an important source for bothcapital and a destination for investment. M&A activity isgrowing in China, where there is more interest in purchasingdistressed properties. He added that India also is becoming asignificant player.

A rebroadcast of the conference is available atwww.mmc.com in the news section.