Following two hesitant years, signs of returning confidence in global M&A are now emerging. Activity is largely concentrated in established markets such as the US and Europe, while APAC is recovering more slowly and Latin America remains a niche market. Deals are therefore returning, yet the broader picture is nuanced and complex. Geopolitical uncertainty continues to disrupt supply chains and energy markets, while AI is increasingly being used in due diligence, reshaping how risk is assessed. Additionally, investors must navigate ongoing economic volatility and unknown or unforeseeable risks beyond the scope of even the most robust due diligence.
Despite these challenges, lower borrowing costs and a modest recovery in investor confidence have helped kickstart deals, particularly in the US. As capital flows back, transactions are becoming larger, yet also more complex and more exposed. For insurers, this creates both opportunities and challenges. Insurers continue to see claims increasing, reflecting the elevated risk, requiring them to be extra vigilant in assessing individual risks and adapt traditional models to reflect current economic and technological realities. It is further essential at a portfolio level to maintain balance and not become overweight in one particular area, which can create volatility and drive losses. While, as a result, premiums may be higher, in this environment insurance is not optional but increasingly essential for companies, their backers and investors looking to expand safely and sustainably.
Geographic nuance
Macroeconomic uncertainty and geopolitical conflicts continue to shape global dealmaking. In Europe, for example, ongoing issues with energy supply, particularly Russia’s control of gas flows, have materially affected energy-intensive businesses, reducing deal viability in certain sectors. By contrast, US markets are comparatively resilient with domestic activity remaining strong. Europe, which to a large extent relies on the success of the US economy, is benefitting accordingly.
APAC presents a more varied picture. China’s subdued economic environment continues to dampen activity across Southeast Asia, which is unlikely to change in 2026. Despite this, China remains an enormous market that still presents opportunity for investors and insurers, as does Vietnam, with its high penetration of private equity investment. Singapore remains the leading consumer of M&A insurance though adoption rates remain lower than in the US or Europe. Across Asia, cultural diversity and the need for market education create additional barriers to adoption outside Singapore. Reports of APAC mega deals may appear eye catching, sometimes cited at 275% year-on-year¹, but this increase is relative to much lower deal volumes in recent years. Absolute volumes remain small.
Most M&A insurance sold in Latin America is tied to cross-border transactions governed by US or English law rather than purely domestic deals. Domestic Latin American M&A insurance is limited due to regional uncertainty. Political and economic volatility require underwriters to adhere to strict underwriting guidelines to ensure long-term sustainability in the market.
More mega deals
One of the clearest signs of positive momentum is the return of larger transactions. Mega deals are increasing in frequency, particularly in the US and Europe, where improved funding conditions and investor confidence are helping to fuel bigger transactions. In APAC the apparent surge is partly due to low prior-year deal volumes.
Scale is increasingly viewed as a competitive advantage. Across all sectors, investors are seeking businesses with broad customer bases, extensive datasets and technology platforms that allow them to integrate AI effectively. Acquisitions are no longer just about incremental growth but leveraging data and technology to strengthen competitive positioning and long-term advantage over rivals. Financial services, including insurance itself, is experiencing similar consolidation for exactly these reasons.
AI and the diligence challenge
AI is being used to rapidly conduct diligence at scale and bidders are increasingly relying on it rather than hundreds of hours of human review. For insurers, this creates uncertainty because there is no historical data indicating whether AI is more or less accurate than humans. Insurers must now assess diligence conducted by AI and decide how it should influence underwriting decisions. Those that will be successful in the insurance market are those that can grasp the implications of this and fully understand the permutations of the different ways AI is being applied.
Sector-specific demand
Technology and AI-linked businesses continue to drive activity, yet investors are also seeking infrastructure assets to provide more predictable revenue streams. These include data centres, transport networks, logistics hubs and other assets with long-term relevance. Energy, both next-generation and traditional, remains in demand as nations focus on energy security and, in some cases, green transition strategies.
Healthcare continues to attract interest, particularly in markets where private-sector provision is expanding to complement public healthcare. Consolidation in healthcare is seen as creating potential for synergies and scale and insurers are seeing sustained demand in this area. Across all sectors, insurance is central to enabling deals that heighten opportunity yet carry and elevated risk.
More activity, more complexity
While M&A volumes are returning, executing deals successfully remains challenging. Geopolitical conflicts, supply chain disruption and rapid technological adoption continue to create uncertainty. Businesses may underperform post-acquisition due to sudden changes in markets or competitive pressures, such as supply chain shocks, regional economic turbulence or rapid technological adoption by competitors, meaning even the most well-planned deals can encounter surprises. These factors increase the likelihood of claims, further highlighting the importance of insurance in managing risks even the most robust due diligence is unable to mitigate.
Insurers are adapting their pricing and risk management accordingly. Premiums may rise but this reflects both the increased risk being accepted by insurers and the value of protection in a much more complex environment.
Looking ahead
Global M&A activity in 2026 is likely to be stronger than in the previous two years, though it is not a simple cyclical recovery, with the environment fundamentally more uncertain, making deals more complex and exposed. Activity will be uneven and concentrated in markets with stable legal and financial frameworks. US and European deals are expected to remain dominant, APAC will see selective growth, while Latin America is likely to remain a niche market. Large, scale-driven transactions, AI-driven diligence and sector-specific demand will further shape the market in 2026, with insurance increasingly a staple underpinning in deal execution.
Success for investors and insurers will depend on understanding both opportunity and risk, navigating complex markets carefully, embracing technological change and recognising that while deals are returning, certainty remains limited.
¹ 2026 Global M&A Outlook | Global M&A Activity in 2026 | Goldman Sachs
