Executing and implementing mergers and acquisitions is the top thing on reinsurance executives' minds, according to a survey from Xuber, an insurance software provider firm.
The survey found that the major challenge reinsurers face as a result of M&A is the cultural integration, with 95% of respondents placing it among their top five concerns, and one such respondent remarks that, “The biggest cause of failure in M&A is lack of leadership and cultural fit.”
Factors driving M&A activity include the ongoing soft market, low interest rates and increasing amounts of third-party capital, which drives down prices and erodes terms and conditions. As a result of increasing M&A, fewer reinsurers will exist, but 80% of those surveyed did not believe that this would lead to less competition.
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