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How to cut portfolio program costs while securing desirable coverage

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By Alexander Ackermann , 

PEMA North America Practice Leader

09/29/2025 · 3 minute read

A common concern among private equity firms considering a portfolio insurance program is whether cost savings could impact coverage quality. 

That tradeoff, however, is largely a myth. When a portfolio program is structured in a strategic way, it can deliver both the desired level of protection and lower costs.

The key to an effective portfolio program often lies in drawing on collective buying power. By coordinating insurance spend across portfolio companies, firms may secure more attractive pricing and broader terms that may not be available through standalone placements. By using scale, private equity firms may be better able to drive value, achieving reduced premiums while also creating opportunities to secure better coverage, fewer exclusions, and more favorable policy conditions.

Showcasing the benefits of portfolio programs

While concerns about trade-offs between savings and coverage are common, a well-structured and supported portfolio program can achieve both cost efficiency and coverage that remains tailored to your portfolio’s specific needs. 

Consider, for example, a portfolio that includes several companies with cyber risk exposures. By pooling and presenting them as a unified portfolio to the market, firms may be able to negotiate more comprehensive coverage, higher sublimits, and even broader definitions of loss — all at a lower cost than standalone programs.

There are numerous benefits to a coordinated approach, including:

  • Coverage benefits. Consolidated purchasing can result in desirable policy language, higher limits, and tailored endorsements.
  • Cost efficiency. Coordinated negotiations can lead to lower premiums, eliminate redundancies, and lower administrative fees. 
  • Greater insurer engagement. Insurers are more likely to offer favorable terms when underwriting a larger overall program for a multi-entity portfolio than they would for a single company.
  • More streamlined claims handling. Centralized programs can streamline claims management, often bringing greater consistency and reducing delays.

Importantly, these savings often don’t require private equity firms or their portfolio companies to compromise. With thoughtful structuring and experienced guidance, portfolio programs can maximize value, delivering the desired protection tailored to each company’s unique risk profile, while reducing overall cost.

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