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RWI for Small Deals: A Strategic Shift in Product Design
Emily Maier
Jul 28, 2025
The US representations and warranties insurance (RWI) market has long been a fixture in M&A transactions, particularly in the mid- and large-cap space. But as dealmakers increasingly look to scale through smaller acquisitions—especially in private equity—traditional RWI has struggled to keep pace. The underwriting process, cost structure, and diligence expectations have historically made it impractical for deals under $50 million.
That’s changing. Two new entrants—MIO Fusion and Blue Chip Aqua—are reshaping the small-deal RWI landscape. These products are not just scaled-down versions of traditional policies; they are re-engineering the underwriting model to meet the needs of a different segment of the market.
The Small Deal Dilemma
Small deals have always faced a structural mismatch with RWI. The diligence burden, underwriting timelines, and fee structures were designed for complexity and scale. For a $20 million add-on, the traditional RWI process can feel disproportionate, both in terms of cost and time.
Insurers are now responding with products that preserve the core value proposition of RWI—risk transfer, deal certainty, and clean exits—while eliminating friction. These innovations are not without trade-offs, but they reflect a broader trend: the democratization of transactional risk solutions.
MIO Fusion: A Synthetic Model for Speed
MIO Fusion is a synthetic RWI product that departs from the conventional model in several key ways. It offers a standardized, non-negotiable policy structure, eliminating the need for a diligence call or tailored exclusions. Instead, buyers complete a structured application, and underwriting is based on a fixed set of synthetic representations.
Key Attributes:
- No Diligence Call: Underwriting is application-based
- Synthetic Reps: Not tied to the purchase agreement
- Low Entry Cost: Coverage under $1 million is available for $60,000–$80,000
- Flexible Financials: Willing to consider unaudited accounts
MIO Fusion is not a fit for every deal. But in scenarios where speed, simplicity, and cost control are paramount—and where buyers are comfortable with standardized coverage—it offers a compelling alternative.
Blue Chip Aqua: Traditional Coverage, Modernized Process
Blue Chip Aqua retains the structure and coverage of traditional RWI but compresses the process. It’s designed for repeat acquirers—particularly PE firms executing roll-up strategies—that need consistency across multiple small transactions.
Key Attributes:
- Shortened Diligence Call: 20 minutes, focused on 10 core questions
- Pre-Call Application: Streamlines underwriting prep
- Standard Forms: Same as traditional RWI
- Lower Diligence Fee: ~$10,000 less than standard
Aqua is ideal for buyers that want full coverage without the full process. It’s a hybrid model, preserving the integrity of traditional RWI while reducing the operational burden.
Unintended Consequences
It is worth noting that the partial use of application forms and written answers rather than in-person calls has been commonplace in the European market for some time. However, the nature of the risk transfer in those markets is different, and the impact this could have on a claims scenario is hard to foresee.
Market Implications: A Tiered Future
The emergence of MIO Fusion and Blue Chip Aqua signals a broader shift in the RWI market: a move toward tiered offerings that align with deal size, complexity, and buyer sophistication. This is a welcome development. It expands access to RWI, allowing smaller deals to benefit from the same protections that have become standard in larger transactions.
But it also introduces new responsibilities for brokers and advisors. These products require clear communication around limitations—particularly with synthetic policies—and thoughtful guidance on when each product is appropriate.
What’s Next: Innovation at the Edges
As adoption grows, we expect further innovation in the small-deal RWI space. Likely developments include:
- Automated Underwriting: AI-driven platforms that reduce underwriting time from days to hours
- Modular Coverage: Buyers select specific reps or risk areas, reducing cost and complexity
- Integrated Solutions: RWI bundled with escrow, tax indemnity, or post-closing support
These changes reflect a broader trend in transactional risk: the shift from bespoke, high-touch solutions to scalable, tech-enabled products. The goal is not to replace traditional RWI, but to extend its reach, making it a viable tool for all deal sizes.
A More Inclusive RWI Market
MIO Fusion and Blue Chip Aqua are early indicators of a more inclusive RWI market—one that recognizes the diversity of deal structures and buyer needs. They are not perfect solutions, but they are pragmatic ones. And in a market where speed, certainty, and efficiency are increasingly critical, that pragmatism is exactly what small deals need.
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