W&I Claims in the Nordic Real Estate Market

Beyond the Checklist: W&I Claims in the Nordic Real Estate Market

Are there even any real claims on real estate transactions? In some corners of the Nordic real estate market, there is a perception that Warranty & Indemnity (W&I) insurance is just a product to tick off the checklist rather than a real tool that delivers when in need. Our data and experience tell usz a different story, and below we will walk you through the claims landscape as we see it. 

What our Data Actually Shows

To understand the Nordic real estate risk profile it is worth highlighting particularly three data points: 

1. Since 2020, approximately 6% of Nordic real estate transactions have resulted in a notified claim under the W&I insurance policy – this is slightly below the average notification rate of 8% across W&I transactions more generally.

2. Of those claims approximately 77% have either resulted in payment or remain ongoing with positive prospects of recovery. While you may never need to make a claim under your W&I policy, those who do have a high likelihood of recovering their loss.
3. Nordic real estate claims account for around 11% of all real estate claims notified under policies placed by Howden since 2020 – reflecting an active and sophisticated transaction environment, but not an outlier market, as the notification rates are still higher in some other European jurisdictions, such as Iberia accounting for around 20% of all real estate claims.

This profile shows that most real estate deals do not generate claims, but when they do, the majority are either paid or progressing constructively. It also indicates that there is room for development in the claims process and utilisation from policy holders (and their advisors). 

The numbers do not suggest product failure. Rather they reflect a functioning insurance solution responding to complex transactions in a mature real estate market. 

The Value Most Buyers Underestimate

If W&I is assessed purely by paid claims, its broader dimension of value is missed. For private equity (“PE”) real estate investors, the most meaningful impact of W&I insurance often occurs before closing even happens.

The underwriting process introduces a disciplined, independent challenge function into the transaction. Insurers require:

• Clear and structured disclosure;
• Full visibility over diligence workstreams; and 
• Engagement from professional advisers. 

Because insurer capital is at risk, underwriting is commercially aligned with identifying exposure early. This means that during the underwriting process (1) ambiguities are tested, (2) assumptions are challenged, and (3) gaps are interrogated.

In many cases, risks that could later have crystallised into actual losses are instead:

• Identified during placement
• Diligenced further
• Mitigated operationally
• Re-priced in the deal
• Or addressed directly in the SPA

The act of seeking insurance thus often flushes out latent risk.

For PE investors focused on governance, investment committee scrutiny and portfolio downside protection, this additional layer of rigour has real value – even where no claim is ever made.

W&I is not just a post-closing recovery tool, it also functions as pre-signing quality assurance.

Why Some Claims Are Validly Declined — and Why That Is Okay

Claim denials in the Nordic real estate space broadly fall into two categories:

• Disclosed matters; and
• Pure property defects.

Neither category indicates systemic weakness of the W&I policy but rather indicates a product functioning as intended within the coverage perimeter.

W&I is designed to cover unknown risks. If an issue was disclosed during diligence, it falls outside the core risk transfer. Likewise, pure property defects are not a substitute for transactional insurance and are ordinarily covered by other insurances. It is worth noting, however, that in the Nordic market we have successfully negotiated specific coverage for certain unknown property defects, reflecting evolving client demand and constructive insurer dialogue.

In other words, where claims are declined, the reasons typically align with underwriting fundamentals rather than a restrictive or adversarial approach by insurers.

Understanding that boundary is critical. W&I is not a blanket warranty of asset condition – it is a structured transfer of unknown contractual risk.

When Claims Succeed — What Makes the Difference

Where claims are paid quickly and efficiently, certain patterns tend to emerge.

In order to confirm cover and indemnify policyholders, insurers need clarity on:

1. The facts and circumstances underlying the claim;
2. The resulting breach of warranty;
3. The loss suffered;
4. The causal link between the breach and the loss; and
5. That no liability or coverage exclusions apply under the SPA or the policy.

Successful claims typically share four characteristics that implement the above:

1. Early engagement with the broker
2. Clear and structured notification
3. Prompt and comprehensive evidence
4. A disciplined and realistic approach to loss

Two recent case studies illustrate how disciplined claims handling drives outcome:

Following the acquisition of retail parks, a tenant sought reimbursement of rent paid during a promised rent-free period that had not been honoured. Early Howden involvement meant the notification clearly particularised breach and loss, supporting evidence was provided upfront, and the insurer confirmed coverage and paid within two weeks.

In another transaction, fewer parking spaces existed than contractually warranted following an office acquisition. While insurers initially confirmed cover for lost rental income but declined associated legal costs, constructive engagement between Howden, the insured’s advisers, and insurers allowed the insured to demonstrate that part of those costs mitigated loss. The insurers ultimately indemnified those amounts.

In both cases, the outcome was influenced not only by policy wording, but by structured presentation and commercial dialogue.

For sponsors and asset managers, the message is straightforward: W&I claims are not adversarial by default — but they require a disciplined approach to ensure they are appropriately evidenced and allow the insurers to agree cover.

A Mature Product in a Mature Market

The Nordic real estate market is sophisticated, institutionally driven and transactionally active. It is therefore unsurprising that claims arise from time to time. Our data does not support any narrative of failure, rather the opposite. 

While a small proportion of transactions generate notifications, the majority of those result in payment or remain progressing constructively with valid declinatures aligning with established underwriting principles.

More importantly, focusing only on recoveries understates the value and contribution of the product. W&I transfers unknown risk, reduces recourse friction, protects sponsor relationships and — through underwriting discipline — strengthens the transaction itself.

For PE investors operating in a competitive Nordic market, that combination remains highly relevant and valuable.

[1] Notified claims includes all claims that have been reported to insurers, whether they are ongoing, closed without payment, or withdrawn; Latter figure calculated as per our last Claims Report period 2020-2024.

[2] We calculate this number by obtaining the number of paid claims and those where the retention is eroded, including those that have neither been paid or been closed, and divide this number by the total number of claims. 

[3] We calculate this number by obtaining the total number of real estate claims in the Nordic region and dividing this number by the total number of real estate claims, irrespective of jurisdiction.