What’s the Real Deal‐Killer in Insurance M&A? It Depends Who You Ask.

M&A in insurance may look like a single funnel — source, negotiate, close — but a recent micro‑survey (N=60) shows it’s more of a layered battlefield. What kills deals is not uniform; it shifts depending on whom you ask inside the organization. And unless leaders acknowledge that, high-stakes transactions may continue to stall in the middle.

C‑Suite Sees Valuation Gaps

For the C‑suite, valuation gaps are the principal roadblock.

• 57 % of C‑level respondents named valuation mismatch as the biggest barrier.
  

• 29 % flagged regulatory friction.
  

• 14 % cited financing or strategic misalignment.

That’s intuitive: boards and CEOs are thinking in terms of enterprise value, synergistic upside, and multiple compression. They push hard on caps, premiums, and optimistic growth assumptions. Their view is forward-looking and top-line.

VPs See Execution Risk

VPs, by contrast, overwhelmingly name financing constraints / strategic misalignment as the deal killer — a full 100 % of them. In practice, that means when a structure is hammered out, it doesn’t match what the business units can realistically deliver on. Incentives, capital requirements, implementation risk — these kill deals in the field.

Meanwhile, VPs don’t see valuation gaps or regulatory drag as primary blockers. They’re closer to the trenches. They know that even if a multiple is agreed, if the financing falls apart or the integration plan is shaky, no deal closes.

Other Stakeholders: A Mix

Other respondents (non‑C‑suite/VP, e.g. business development, legal, operations) give a mixed picture:

• 50 % say regulatory friction
  

• 33 % say financing/misalignment
  

• 17 % say valuation gaps

This group is likely to see deal attrition at the interface of legal, compliance, and execution. Regulatory scrutiny, due diligence surprises, or last‑mile negotiation on structure tend to stall things.

Overall, among all respondents,

• 30 % cite valuation gaps
  

• 30 % say regulatory friction
  

• 40 % believe financing / strategic misalignment is the biggest barrier

Why the Discrepancy Matters

This divergence of opinion suggests a hidden disconnect inside many firms. The leadership team and board might negotiate on multiples, but middle management is challenged to make the deal executable and finance it. Without intentionally surfacing this misalignment, deals may stagnate between term sheets and closing.

Also, regulatory friction is an underrated wildcard: when half of “other” stakeholders flag it, it means compliance and legal checkpoints are structural choke points.

Where Should Firms Focus?

1. Bridge the valuation‑execution divide
   Use bridging tools — long‑tails, earnout structures, contingent value rights — so that upside can be shared without overstretching risk tolerance.
   

2. Translate strategic intent to execution playbooks
   The strategic rationale for the deal must map to operational KPIs. VPs should see in advance how targets will be integrated, when capital will be injected, and how synergy delivery will be measured.
   

3. Embed governance at multiple levels
   A validation checkpoint mid‑deal (e.g. by integration or finance leads) can flag misalignment before the deal is signed.
   

4. Frontload regulatory diligence
   Given regulatory friction shows up in both C‑suite and “others,” early regulatory scanning (pre‑LOI) can save weeks or months of rework.

The Bottom Line

Deals don't die for one reason — they die because different parts of an organization see different risks. The C-suite sees valuation, middle management sees execution, and compliance/legal sees regulatory drag. To close deals more reliably, firms must build alignment across that spectrum: from boardroom multiples down to execution roadmaps.