Looking Ahead to 2026: Private Equity Risk and Insurance Trends

Early data initially supported this view. We saw an uptick in deal flow in Q4 2024 and into Q1 2025, suggesting positive momentum. Yet this momentum was stifled in Q2 2025 by ongoing tariff fallout and a Federal Reserve unwilling to cut interest rates further until the September meeting, where the Federal Reserve did lower rates by 25 bps.

After several years of uncertainty—COVID, rising inflation, wars in Ukraine/Russia and Israel/Palestine, and rising interest rates)—the US private equity market is learning to adapt to these challenges to get deals across the finish line. We saw this in late 2024 and Q1 2025, and while tariffs and interest rates may have weakened deal flow in exits in Q2, we expect to see an increase in US deal activity in Q3 and Q4.

Looking forward to Q4 2025 and into 2026, we believe that while the deal landscape may continue to evolve and new structures develop, deal flow will increase compared to 1H 2025. Private equity buyers will remain focused on operational improvements within each portfolio company to enhance EBITDA margins before taking assets to market.

Following are highlights from our guide, Looking Ahead to 2026: Trends in Private Equity, Insurance Due Diligence, and RWI. You can read the  full Guide here. Plus, watch the Looking Ahead Guide  on-demand webinar for more insights.

The Importance of Due Diligence

From an insurance perspective, what does this macro backdrop mean for private equity firms engaged in completing due diligence and seeking to close transactions in Q4 2025 and 2026? From our perspective, insurance due diligence (including post-close diligence) will continue to be a critical workstream as deal teams and operating professionals seek ways to improve and maximize EBITDA margin and mitigate risk to their investment assets.

In pre-close due diligence, firms can identify strategies and efficiencies as well as project their financial impact, while in post-close diligence, firms can implement new strategies.

RWI Rates are Still Low

We have seen the slightest uptick in reps and warranties insurance (RWI) rates as deal flow has slowly increased. However, rates are still at very low levels.

What does this pricing trend mean for M&A insurance buyers? It's still a good time to get RWI, especially for deals that underwriters historically have been more cautious about.

Read the Guide to Understand the Top Trends

In the full Guide, we break down the top trends in private equity and transactional insurance. We explain:

• How PE professionals are using incremental improvements to improve a company’s margins
• How various alternative deal structures affect insurance and employee benefits due diligence, as well as post-acquisition insurance brokerage implementation strategy.
• The growing popularity of portfolio-style programs for property, casualty, and management liability—and when they are (and aren’t) beneficial
• More details on the competitive RWI market
• How the RWI market has evolved to better serve smaller transactions
• What the rise in RWI claims activity means for underwriter selection

Get instant access to the full Guide  here.