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Private equity insurers and brokers sharpen focus amid more selective deals
Sompo says brokers and carriers are investing in specialization and tighter diligence as sponsors keep more than enough available capital and apply greater discipline on valuation, growth assumptions, and operational risk.
Risk & Insurance, via sponsored content from Sompo, says that as private equity deal activity becomes increasingly selective, brokers and carriers are making tactical moves to better serve private equity sponsors and their portfolios. The article points to specialization, deeper relationships, and process improvements as insurers prepare for deal activity to normalize.
It also describes how private equity spending was constrained in prior years, with deal activity trailing historical norms and financing decisions affected by interest rates, while uncertainty made planning harder for sponsors and their investors. For the insurance industry, the pause is framed as an opportunity to build capabilities before activity picks up.
Sompo quotes Dan Reinert, SVP and Private Equity Practice Leader at Sompo, saying that despite recent upticks in deal activity, dry powder remains. He adds that sponsors are approaching investments with greater discipline around valuation, growth assumptions, and operational risk, along with a more structured diligence process.