Charlie Tice is the private equity national practice lead for Travelers. Risk & Insurance recently spoke to him as part of our expanded coverage of our 2025 M&A Power Broker® winners and finalists. What follows is a transcript of that discussion, edited for clarity and brevity.

Risk & Insurance: Thanks for talking with us, Charlie. What is your outlook for M&A in 2025, and how are carriers responding to the current environment, particularly considering the recent interest rate challenges we have seen?

Charlie Tice: At Travelers, we’re optimistic about the year ahead. While deal flow appeared to plateau in 2024, S&P Global estimates that there’s roughly $2 trillion of private equity dry powder on the sidelines, ready to be deployed into various industries.

Many of the industries Travelers serves, including manufacturing, technology, construction and healthcare, to name a few, are ones where we’re also seeing capital being invested, making this an especially exciting time for us.

R&I: What insights did you gain from the CFO study or survey you conducted in 2024?

CT: In 2024, we surveyed more than 600 CFOs in insurance decision-making roles for companies with 500-plus employees across a mix of industries. The questions covered topics ranging from core responsibilities to corporate strategy, which allowed us to gather data on key trends, challenges and opportunities that CFOs were navigating.

One of the significant findings from the study was the increasing focus on digital transformation and technology adoption among financial leaders. CFOs recognized the critical role that technology plays in driving efficiency, enhancing decision-making and staying competitive in a rapidly evolving business environment.

Additionally, the survey highlighted the importance of risk management and resilience planning. CFOs emphasized the need for robust risk assessment strategies and contingency plans to mitigate potential disruptions and ensure business continuity in the face of uncertainties.

R&I: How do your findings tie into mergers and acquisitions, and what is the impact on CFOs or other C-suite executives?

CT: Notably, 70% of the CFOs we spoke to, across mid- to large-sized companies, reported being moderately or highly impacted by mergers and acquisitions. This highlights the significant influence that M&A activities have on the roles and responsibilities of CFOs and other C-suite executives.

R&I: What was a key finding from the survey that stood out to you regarding companies’ risk management practices?

CT: One notable finding was that 38% of respondents said their risk management practices were reactive. This means they typically wait for an incident to occur before examining the process that may have caused it.

That’s a trend Travelers can help reverse. By working with customers to institute risk management processes and procedures, we can assist them in mitigating risk proactively rather than managing it reactively at a single point in time.

R&I: What is the importance of good risk management practices, particularly in the context of due diligence?

CT: Good risk management practices are crucial, especially when it comes to due diligence. It’s essential to focus on the front end of the process rather than the back end.

By conducting thorough due diligence up front, potential risks can be identified and mitigated early on. This proactive approach helps prevent issues from arising later in the process, which can be more difficult and costly to address.

R&I: What identifies a superior broker in the M&A environment from your perspective?

CT: In the M&A environment, specialization is extremely important. Private equity firms want to align themselves with brokers or agents who have specialization and understand the vernacular and language of private equity, even in the most simplistic terms.

Superior brokers are clear, confident communicators who invest time in educating themselves on the industry. They actively listen to their customers to understand how industry trends and studies, such as Travelers’ CFO study, impact them from a management perspective or within their own organization.

At Travelers, we also look to partner with those who have organized themselves and created specialization around M&A.

R&I: What technologies or trends are impacting the ability to identify and mitigate exposures in mergers and acquisitions?

CT: We’ve invested in technologies and have a wealth of information within our organization that allows us to analyze how different industries have performed over time. By leveraging statistics and data, we can translate insights across industries and predict trends.

For example, by examining the utilization of our own risk control services, we can identify what matters in manufacturing or other specific industries to proactively manage risk across a portfolio. Notably, firms are holding on to their investments longer. In 2022, the estimated hold period for a private equity firm’s investment was about 5.7 years, according to a study by S&P Global. In 2023, the hold period has extended to 7.1 years.

Private equity firms seek to partner with large insurance companies that can understand how to use robust data and analytics to benchmark against industry averages and provide solution-oriented claim services. The ability to digest this information and make it transferable for private equity firms and their portfolio companies is critical.

R&I: What is the significance of private equity firms extending their investment hold periods, and how does this relate to risk management?

CT: The extension of investment hold periods by private equity firms is quite interesting. It underscores the importance of proactive risk management. The more time and effort invested in risk management up front, the better the investment performs over time, especially as hold periods continue to lengthen.

This proactive approach to risk management is vital. It not only safeguards the investment but also enhances its potential for long-term success. As private equity firms adopt longer investment horizons, thorough due diligence and robust risk mitigation strategies become even more imperative.

R&I: Where do you see claims arising most frequently or severely?

CT: One example of where we’re seeing frequent claims is in workers compensation.

In the 2024 Travelers Injury Impact Report, which is an analysis of five years of Travelers workers compensation claim data, we found that the most frequent cause of injury was overexertion, accounting for roughly 30% of overall claims.

Slips, trips, falls, overexertion and being struck by an object are the most common causes of large losses, defined as those costing $250,000 or more. Notably, 35% of workforce injuries occur during a worker’s first year on the job, resulting in over 6 million missed workdays.

Inexperience, workforce shortages and maintenance issues contribute to these often avoidable accidents. Frontline managers play a crucial role in engaging employees and preventing incidents and injuries, especially in the challenging mergers and acquisitions integration environment, where different management styles, cultures, and workforce-related challenges exist.

R&I: What are the key risk management strategies for private equity firms when it comes to their portfolio companies, particularly in the areas of workers compensation, auto and property?

CT: When it comes to workers compensation, creating consistent cultures, management styles and proactive risk management across a private equity firm’s portfolio of companies is critical. Remember to also integrate these elements whenever a new company joins the portfolio.

Auto exposure presents challenges from both frequency and severity perspectives, regardless of the industry. Private equity firms must identify risk control opportunities that can be broadly implemented across their entire portfolio. Developing a comprehensive strategy to address auto exposure is crucial. Travelers can help here as well, as we have extensive fleet risk management and risk assessment services for our customers.

For property, water and fire damage claims drive frequency. To mitigate fire risk, Travelers inspects thousands of facilities annually and provides actionable recommendations to help customers improve safety procedures and sprinkler systems.

R&I: How would you characterize the value of understanding the history of a property when conducting mergers and acquisitions?

CT: Understanding the history of a property can be incredibly important. Without it, the knowledge gap could lead to unexpected issues or missed opportunities. Thoroughly researching the property’s past can provide valuable insights that inform the decision-making process and help mitigate potential risks.

R&I: What are the most effective ways for brokers to stay informed about relevant risk management and coverage trends?

CT: Brokers can best educate themselves by closely following the M&A environment. The most successful agents and brokers in our community are those who specialize in private equity and have organized their own infrastructures to support their relationships with PE firms.

By developing this expertise, brokers can provide valuable insights and tailored solutions for their PE clients, helping them navigate the complex risk landscape associated with mergers and acquisitions.

Travelers’ Private Equity Practice is focused on delivering solution-oriented insurance programs for these broker partners, with an understanding that speed and responsiveness can be a differentiator in this space. &