Ellen Bennett, deputy editor

Be careful what you wish for. Fairy godfathers waving blank cheques might be every businessman’s dream and, as we report this week, they are queuing up to invest in insurance, the economy’s last safe bet. But whether the suitor is a Dragons’ Den-style entrepreneur with a pile of cash, a private equity house or simply a bank offering a healthy loan facility, sign up with a money man and you sign away some of your rights.

This is particularly true now, as a recession takes hold that might last for years. It is going to be tougher to make money, and the figures pulling the strings will scrutinise their investments more closely – and expect greater control.

This is already happening. The private equity houses that stake some of the major consolidators are laying down the law. The banks too are getting restless – debt is still available, but it’s more expensive and comes with more strings. Refinancing debt this year will be a tricky business, with the negotiating power firmly held by the banks. No doubt as the economy worsens, UK shareholders will start to flex their muscles when share prices drop – following the example of the Fortis shareholders who are suing the Dutch state. As Alex Alway of Jelf says, it’s a tough time to list on the stock market, making those private investors look even more attractive.

It would be naive to suggest that any business can grow and prosper without outside money, but it is worth pausing to consider the consequences of the size of the investment and the type of investor. Fairy godfathers come in many different shapes and sizes, each with their own pros and cons, as consolidators and other businesses will discover to their cost this year. Our guide on page 14 is a good place to find out more.

You’re not the villains of the flood any more

The tides have turned. Eighteen months after the floods of 2007, the government and other interested parties have stopped demonising insurers and admitted that the responsibility for dealing with floods is shared by many groups (see page 20). This week, the ABI has laid out what it expects from builders in return for the continued provision of flood risk cover to new-build homes. For the first time, insurers are in a strong bargaining position: they should use it.