Merger and acquisition (M&A) activity in the insurance industry is increasing, although the number of deals still remains well below levels seen before the financial crisis, according to Swiss Re's latest sigma study, “M&A in Insurance: Start of a New Wave?”
The recent M&A upswing is largely concentrated in certain sectors such as specialty reinsurers and insurance intermediaries, says Swiss Re.
Survey results indicate that sentiment toward M&A is turning as confidence about the economy gradually improves and market participants look for deals to boost profitability as well as bolster their balance sheets. Of late, there also has been a pick-up in M&A deals in the property & casualty reinsurance sector.
According to Swiss Re, key M&A trends in insurance include:
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Defensive divestments and strategic sales of closed blocks and run-off operations
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Increased involvement of alternative investors, and strategic (regular and forced) deals focused on expanding expertise
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Distribution capabilities and geographical reach.
Globalization is also driving M&A activity. Insurers from advanced countries continue to focus on overseas expansion in high growth markets, the report adds.
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Jayleen R. Heft
Jayleen Heft is the digital content editor for PropertyCasualty360.com. Contact her at [email protected].
