The global mergers and acquisitions (M&A) insurance market demonstrated sustained resilience throughout 2025, with insurance capacity remaining plentiful and transactional solutions firmly embedded in deal-making across all scales, according to Gallagher’s Global M&A Insurance 2025 Review and 2026 Outlook report.
Despite macroeconomic headwinds – including elevated interest rates, shifting tariff policies, and ongoing geopolitical instability – the market continues to expand, with submission volumes rising year-on-year and product innovation accelerating across core insurance lines.
Gallagher’s report describes coverage terms as broadly favourable for buyers, with insurers applying fewer policy exclusions and increasingly offering enhancements designed to reduce friction at the claims stage. Transactional insurance solutions – spanning Warranty & Indemnity (W&I), tax, contingent risk, and insurance due diligence – are now considered standard instruments across geographies, sectors and deal sizes, from enterprise values below £5 million to multi-billion-pound transactions.
One global insurer reported an approximately 17% year-on-year rise in submissions, alongside an estimated 5% increase in average deal value.
Significant regional differences shaped the 2025 landscape. In the United Kingdom and the European Economic Area, robust lower-to-mid-market deal flow led to a decline in average deal size compared with 2024’s larger transactions. Technology and healthcare sectors attracted the highest retentions due to transaction complexity, while real estate and infrastructure benefited from nil retention structures.
In the United States, middle-market transaction volumes fell, but mega deals drove a sharp rebound in overall deal value. Representations and Warranties (R&W) insurance submissions rose 5% year-on-year, with average quoted rates increasing from 2.5% in Q4 2024 to 3.23% in Q4 2025, according to Gallagher’s transactional risk data.
The Middle East was a notable outlier, recording a 13% increase in deal volumes, according to PwC’s Global M&A Industry Trends: 2025 Mid-Year Outlook.
The tax insurance market continued its upward trajectory, increasingly seen as a hedge against broader M&A volatility. Market capacity has grown considerably, with approximately 25 specialist tax insurers now operating in the UK and Europe - more than double the 11 reported five years ago.
Geographic appetite is also expanding, with South Korean, Middle Eastern, Peruvian, and Colombian tax risks attracting renewed insurer interest. Gallagher’s report suggests tax insurance could surpass W&I and RWI markets within the next decade if current growth trends continue.
The Contingent Risk Insurance (CRI) market is expected to play a greater role in 2026, driven by increasing transaction complexity, reduced liquidity, and the demand for innovative risk management solutions. CRI can reduce large balance sheet provisions by transferring defined risks to insurers, making it particularly relevant in restructuring and financing contexts.
Insurance Due Diligence (IDD) is gaining importance in the lending sector. As debt funds expand into the mid-market and lender activity spreads across Europe, IDD is positioned as a key tool to identify programme gaps, benchmark costs, and support sound transaction execution.
Looking ahead, Gallagher’s report notes cautious optimism for 2026, supported by significant deployable capital from private equity funds and corporates with strong balance sheets, alongside stabilising interest rates. Global private capital deal value reached US$2.1 trillion in 2025 - a four-year high - despite an approximately 8% decline in deal volume compared with 2024.
That optimism is tempered by the ongoing Middle East conflict, which has increased volatility in energy markets, disrupted regional supply chains, and introduced fresh geopolitical risks that deal teams must factor into pricing and execution.
