Global insurance M&A hits four-year high

BY Richard Summerfield

The level of global insurance industry M&A has increased considerably in recent years, according to Clyde & Co’s ‘Insurance Growth Report 2019’.

There were 222 completed insurance M&A deals worldwide in the first half of 2019, up from 196 in the second half of 2018, a 13.2 percent increase – the highest increase in the volume of transactions since the first half of 2015. The figure also represents the fourth consecutive six-month period of M&A growth. Mega-deals have continued to be a factor in dealmaking in the insurance space, with 11 deals in H1 2019 valued at over $1bn. There were 18 in the whole of 2018.

“Despite recent signs of market hardening, delivering a positive result for shareholders remains challenging and M&A is an attractive strategy to deliver growth for re/insurance businesses around the world,” said Ivor Edwards, a partner and European head of the corporate insurance group at Clyde & Co.

Europe has seen a rush of completed deals that had been put on hold due to Brexit preparations, the report notes. Europe saw the biggest increase in M&A activity – up 39.7 percent – with 88 completed deals in H1 2019 compared to 64 in H2 2018. France led Europe in terms of insurance M&A activity and was the second most active country worldwide, just behind the US. The UK and Spain were next in the list.

Away from Europe, dealmakers have been buoyed by a combination of strong economic growth, notably in the US, and positive growth prospects for the insurance sector. In the Asia-Pacific region, 38 insurance M&A deals were recorded during H1 2019, marking the fourth straight period of rising deal volume to the highest level since 2015. Japan led the region in terms of deals made, followed by Australia and India.

Though the US remains the world’s most active nation in terms of M&A volume, it saw its third consecutive drop in H1 2019, with 66 deals completed. Geopolitical and financial uncertainty relating to potential trade wars involving the US may have rattled investors and could make dealmakers more cautious in the second half of 2019.

Report: Insurance Growth Report 2019

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