A new era for M&A and bespoke transactional risk insurance – Devonshire

As we look toward 2026, the global M&A landscape is entering a new phase, one defined by strategic ambition, deal complexity, and heightened risk awareness in an interconnected and volatile world.

From cross-border infrastructure consolidations to carve-outs in the tech sector, transactional activity is picking up pace across a wide range of industries. In this context, the role of transactional risk insurance to provide resilience and protection for deals is front and centre in our changing world.

At Devonshire Underwriting, we see this every day. Our MGA specialises in supporting complex M&A deals with bespoke solutions, from Warranty & Indemnity (W&I) insurance to contingent risk cover.

What’s changed in the recent past is the level of creativity, nuance and strategic importance placed on these products. They’re no longer niche bolt-ons, they are now embedded in the dealmaking process from the outset.

According to the MGAA and Clyde & Co’s 2025 MGA Market Survey, 37% of MGAs and 29% of carriers view specialty lines as the top growth area for the year ahead.

While that includes insurance for traditional sectors like financial lines or cyber, it also reflects the rising demand for highly tailored specialty products such as W&I, tax and contingency insurance, particularly as deal flow activity gains momentum in different regions globally.

Looking ahead to 2026, it’s the volume of mid-market and cross-sector deals that’s driving real opportunity we feel.

Whether it’s Nordic construction firms joining forces, healthcare acquisitions in Southern Europe, or renewable energy spin-outs in the UK, these deals come with unique legal and commercial risks. That’s where specialist transactional risk cover makes a real difference.

At Devonshire, we’re particularly excited about the evolution of contingent risk insurance.

Once seen purely as litigation-related cover, it’s now used far more strategically: unlocking trapped capital in distressed M&A, smoothing insolvency-driven restructures, or helping address identified issues in cross-border transactions.

In 2026, after a challenging period driven by a number of litigation-related losses, we expect contingent risk to truly come into its own as these more nuanced applications of the product pick up momentum. Two structural shifts are enabling this.

First, underwriting has matured. Legal and restructuring professionals are now bringing a deeper lens to policy construction, working hand-in-hand with brokers to craft tailored solutions.

Second, market understanding has grown. These covers are now recognised not just as safety nets, but as strategic tools that enable deals to get over the line.

Meanwhile, the W&I insurance market, which experienced pricing pressure during the soft market of early 2024, is stabilising. With improved economic conditions and more disciplined underwriting, pricing has recalibrated. Average premiums fell from around 1.1% to 0.7% over the past five years, but 2026 could see modest increases as deal sizes grow and risks become more layered.

The path forward will require agility and judgement. Political instability, economic uncertainty, regulatory divergence, and fluctuating interest rates all contribute to an uncertain backdrop. For underwriters, that means remaining sharply focused on risk selection and execution. What we are seeing is demand for experienced teams that can be fast, transparent, and unafraid to challenge assumptions.

Our message for 2026 is clear: transactional risk insurance is no longer a specialist afterthought. It’s a core and often bespoke component of modern M&A, delivering certainty where it matters most. For brokers, deal advisors and corporates alike, the opportunity lies in partnering with underwriters who bring not just technical expertise, but creativity, discipline, and conviction.