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Why mandates aren’t the answer for portfolio programs

A common misconception is that private equity sponsors need to require every portfolio to join a unified insurance program.
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By Katherine Gensheimer , 

Chief Client Officer, PEMA North America

08/11/2025 · 3 minute read

A common misconception is that private equity sponsors need to require every portfolio to join a unified insurance program. In reality, the most successful programs rely on value — rather than compulsion — to drive participation.

When portfolio companies see the tangible benefits of a unified insurance program — such as better pricing, broader coverage, and streamlined administration — they are often more willing to opt in. This voluntary approach can preserve autonomy, strengthen sponsor-manager trust, and boost long-term engagement.

Key benefits at a glance 

By leveraging relationship capital and clear communication, sponsors like you can introduce a platform that stands on its own merits and provides multiple benefits, including:

  • A value-first platform. When properly built and effectively maintained, a unified insurance platform can deliver measurable savings, enhanced policy terms, and centralized reporting.
  • High voluntary adoption rates. Clear value propositions and ongoing engagement can lead to participation rates of well above 80% achieved without mandates. High levels of voluntary participation are a reflection of the effectiveness of a value-driven approach.
  • Significant cost savings. Portfolio companies typically enjoy substantial cost savings by aggregating their risk and drawing on collective buying power. While savings can vary, the benefits of a unified insurance program also often include enhanced coverage and reduced administrative burdens.
  • Ongoing support and education. Regular data insights, benchmarking, and risk-management resources help portfolio companies make the needed changes to maximize the return on investment (ROI) of their participation in a portfolio program. Data helps companies understand the evolving landscape of risks and the importance of proactive risk management.

Expanding the value proposition

To further enhance the appeal of portfolio programs, sponsors can consider the following strategies:

  • Invest in tailored solutions: Recognizing that each portfolio company may have unique needs, consider working with insurance providers to customize coverage options that align with specific business risks. This tailored approach can increase the perceived value of participation.
  • Produce success metrics: Establishing clear metrics to measure the success of the insurance program can help demonstrate its value to portfolio companies. Regularly sharing these metrics can reinforce the benefits of participation and encourage ongoing engagement.
  • Foster community engagement: Creating a sense of community among portfolio companies can foster collaboration and knowledge sharing. By facilitating networking opportunities and discussions around risk management best practices, sponsors can enhance the overall value of the program.

In a landscape where effective risk management is paramount, embracing a voluntary, value-driven approach to portfolio insurance programs not only empowers individual companies but also strengthens the entire portfolio. By prioritizing value over mandates, you can cultivate a culture of trust and collaboration that drives long-term success for all stakeholders involved.

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