“In most instances, especially in the insurance industry, when it comes to M&As, one company’s loss is indeed another company’s gain,” says Jack Gibson, Towers Watson’s managing director of global mergers and acquisitions.

“Another insurance company that might be devoted to the business line that is being sold could make the acquisition and strengthen its focus and industry position. In turn, the larger financial entity can use the revenues from the divestiture to invest in its more streamlined business—basically a win-win for both companies,” he adds.

Acquisitions are as common in and out of the insurance industry, but mergers are more common outside of the industry (22 percent compared to 7 percent), says Towers Watson.

Continuing with reasons why M&A activity occurs, 31 percent of respondents say cost-structure optimization, though non-insurers cite this as a reason less frequently, says Towers Watson, adding that although managers in the insurance industry are more likely to be involved with the integration team, U.S. insurers do not give managers the support they need to develop operational and cultural elements of the M&A.

Beyond the strategic and financial reasons for M&A, insurers need to focus operational and cultural elements for the transaction to succeed, Towers Watson advises.

More than 200 managers—100 from the insurance industry—took part in the survey, says Towers Watson.