Report: Experts anticipate increase in M&A activity in global reinsurance sector

ssions take shape, focusing on the organization’s culture, values, and people to ensure a smooth integration process,” Plomer emphasized. “Proactively assessing people-related challenges is vital in enhancing deal value and facilitating integration.”

When it comes to HR due diligence, the survey highlighted that retention of key non-executive personnel was a top priority for 78% of respondents. Additionally, half of the survey participants rated non-executive talent as the most crucial integration metric, compared to only 29% who prioritized leadership retention. Moreover, aligning cultures between merging entities was identified as a significant challenge by 74% of non-US companies and 54% of US firms.

The study also revealed the increasing importance of generative artificial intelligence (AI) in M&A transactions, with 65% of respondents believing that it will impact the process within the next two years. However, most companies are still waiting to adopt Gen AI, with some potential use cases including legal analysis and employee communications. WTW noted that the integration of generative AI remains limited, despite its promising applications.

Virtual data rooms have made sharing documentation more convenient, but they have also introduced risks, especially when buyers are bombarded with excessive information that may obscure underlying risks. Particularly in cases where data integrity is questionable and timelines for due diligence are tight, virtual data rooms can complicate the assessment process.

As M&A activity is expected to increase, the corresponding M&A insurance market will also experience changes. Risk protection products, such as representations and warranties (R&W) insurance, tax indemnity policies, and contingent risk solutions, have become popular tools for buyers and sellers alike. Insurers in the transactional risk space will closely monitor the market to adjust pricing and terms accordingly, especially if mid-market and cross-border deals return to pre-pandemic levels.

Furthermore, the role of specialist brokers in structuring and placing complex insurance policies has expanded, especially when dealing with human capital issues and talent retention. Underwriters are paying closer attention to cultural alignment and post-deal integration in their risk assessments to ensure that the deals, whether insured or not, are successful.

Ultimately, the success of M&A deals hinges on early alignment between business and people strategies. Plomer underscored the importance of involving HR from the beginning, stating that integration efforts should commence well before finalizing deals to capture value and prevent surprises. In conclusion, HR teams must be proactive in preparing for the anticipated wave of M&A activity to ensure successful outcomes.