Mergers and acquisitions will continue to be a primary source of growth in the insurance sector in 2015—building upon the momentum exhibited in 2013 and 2014, according to a new study from Deloitte.
Factors contributing to this increased M&A activity include strengthening macroeconomic conditions, including the possibility of a rising interest rate; continued organic growth challenges; historic levels of excess capital and pressure to put that capital to work as stock buybacks become a less-favored capital management vehicle; increased interest in insurance M&A from strategic, private equity and foreign buyers; and several large, late-2014 transactions that have increased M&A visibility among company boards and in the C-suite.
For example, Deloitte notes that in 2014, there were eight $1 billion or more deals that made up a small percentage of the 399 transactions involving brokers and underwriters. By comparison, only eight deals worth $1 billion or more were executed over the past several years.
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