Deal insurance demand rises as buyers guard against M&A risk

Valuation gaps topped dealmakers’ concerns at 48%.

Use of representation and warranty insurance in mergers and acquisitions (M&A) deals is expected to rise in 2026, which signals renewed dealmaker confidence despite ongoing geopolitical and regulatory uncertainty.

Fifty-eight per cent of respondents expect use of R&W/W&I insurance to increase this year compared with 2025, including 32% who anticipate a significant rise, according to the fourth edition of the Global M&A Trends and Risks report from Norton Rose Fulbright and Mergermarket.

The trend is particularly evident in South and Southeast Asia and Africa.

The wider survey found 52% of business executives expect global dealmaking to increase in 2026 relative to 2025, including 20% forecasting a significant increase. 

That marks a sharp rise from last year’s survey, in which only 38% expected M&A activity to grow.

Technology is expected to lead cross-border M&A growth, with 67% of respondents naming it the top sector for expansion, ahead of industrials and energy. 

Artificial intelligence (AI) remains a particular draw, with 78% of respondents citing it as offering the most attractive dealmaking opportunities this year, up from 60% in 2025. 

Around 24% of respondents, rising to 38% amongst private equity participants, are looking to acquire businesses that make significant use of AI, whilst a further 14% are targeting pure-play AI companies.

Private equity dry powder is expected to be a key driver of deal activity, cited by 48% of respondents as a top-three factor, alongside industry consolidation (45%) and disposals of non-core assets (37%). 

On financing, 86% of respondents said private credit would remain a key source of M&A funding over the next two years, whilst half expect financing conditions to ease, including 19% who expect a significant improvement.

The United States and Europe are expected to be amongst the strongest markets in 2026, with 48% and 43% of respondents respectively anticipating a significant increase in deal activity in each region. 

Confidence is also improving in Asia-Pacific, supported by consolidation, supply chain resilience and non-core disposals, whilst Canada stands out with 57% of respondents expecting deal activity to rise.

Valuation gaps are forecast to be the biggest barrier to completing deals in 2026, cited by 48% of respondents as a top-three challenge, ahead of geopolitical uncertainty (39%) and financing constraints (37%). 

It is the first time in recent years that valuation gaps have topped dealmakers’ concerns. On regulation, antitrust was the most cited obstacle, drawing an average of 35% of top-two responses across all regions, followed by sanctions and anti-corruption policies (32%) and foreign direct investment rules (26%).

Raj Karia, global head of corporate, M&A and securities at Norton Rose Fulbright, said dealmakers were returning to disciplined, strategy-driven transactions after a period of disruption. 

He said that whilst geopolitical and regulatory pressures remained, dealmakers were adapting through financing, structuring and targeted investment in areas such as AI, with strong fundamentals supporting increased activity in 2026.