Global M&A transactions rise to 10-year high

Mergers and acquisitions (M&A) in the global insurance industry increased at the fastest pace for a decade in the first half of the year, a Clyde & Co report says.

A total of 242 deals were completed in the period, up 9.5% from the 221 transactions in the December half and compared with 197 at the same point last year.

“In the face of stark economic pressures – inflation, rising energy costs, and looming recession – insurers remain focused on growth opportunities,” Clyde & Co Partner in Munich Eva-Maria Barbosa said.

Private equity (PE) firms and asset managers also remain keen to explore entry into the insurance market or expansion of existing footprints, Ms Barbosa says, while flagging insurtech valuations mean acquisitions are increasingly attractive to PE investors and traditional carriers seeking to boost technological capabilities.

Significant deal activity in the US pushed the number of transactions in the Americas to 132, the highest number of transactions in 10 years, up from 108 in the second half of last year.

Deal numbers in the Asia Pacific rose 12.5% to 27, with Japan the lead acquirer ahead of Australia. Transactions in Europe fell 9.5% to 67, while in the Middle East and Africa numbers rose to 16 from 12.

The merger of US-headquartered Apollo Group Management and Athene Holdings, in a deal valued at $US7.7 billion ($11.1 billion) was the largest transaction.

Eleven of the top 20 deals by value involved acquirors from the Americas, with the US accounting for six Bermuda three and Canada and Colombia one each.

The six-month period also saw a significant increase in transactions involving the divestment of non-core assets as carriers focus on their main business in a challenging environment.

“Europe has seen a large number of run-off deals which are used to make sure there isn’t any unwanted old business sitting on the balance sheet that might hinder a possible M&A transaction,” Partner in London Ivor Edwards said.

Clyde & Co says while the survey focuses on the carrier space, there is also significant M&A activity in distribution, with PE interest driving an increase in broker consolidation and expansion across the US, Europe, the Middle East and Africa and Australia.