Dealmakers are betting on insurance to close the gap between rising confidence and lingering risks in mergers and acquisitions. Demand for representation and warranty policies is expected to climb in 2026.
A survey by Norton Rose Fulbright and Mergermarket found 58% of respondents predict an increase in the use of these policies this year compared to 2025. Nearly a third anticipate a significant rise, marking a move toward risk mitigation as deal activity recovers.
The shift is strongest in South and Southeast Asia and Africa, where buyers increasingly rely on insurance to guard against post-deal disputes over financial statements, contracts, or undisclosed liabilities.
Optimism about M&A activity is improving after a slow period. The survey revealed 52% of executives expect global dealmaking to increase in 2026, up from 38% who held that view last year. One in five forecast a notable rise.
Technology leads cross-border deals, with 67% of respondents naming it the top sector for expansion. Artificial intelligence drives much of the interest: 78% see it as the most attractive opportunity this year, up from 60% in 2025. Nearly 40% of private equity firms target businesses that heavily use AI, while 14% focus on 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 and disposals of non-core assets.
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Valuation gaps have become the biggest obstacle to closing deals. Nearly half of respondents ranked them as a top-three challenge, ahead of geopolitical uncertainty and financing constraints. This marks the first time in recent years that valuation mismatches have topped the list of dealmaker concerns.
On financing, 86% of respondents said private credit would remain a key source of M&A funding over the next two years. Half expect financing conditions to ease, including 19% who expect a significant improvement.
The U.S. and Europe are expected to lead the rebound, with 48% and 43% of respondents, respectively, anticipating a notable increase in deal activity. Asia-Pacific is also rising, driven by consolidation, supply chain resilience, and divestments of non-core assets. Canada stands out, with 57% of respondents predicting a rise in activity.
Regulatory hurdles remain a persistent issue. Antitrust concerns lead the list, cited by 35% of respondents as a top-two obstacle, followed by sanctions and anti-corruption policies, and foreign direct investment rules.
Raj Karia, global head of corporate, M&A, and securities at Norton Rose Fulbright, said dealmakers are 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.
