Report: Insurance dealmaking slows in first half of 2022
Of the 343 announced deals in the first half of 2022, 91% were brokerage target companies.
2021 was an active year for dealmaking in the insurance industry, but due to factors like geopolitical instability and rising interest rates and inflation, deals slowed down toward the end of the year. This cooler trend continued through the first half of 2022, according to PwC’s “Insurance: Deals 2022 midyear outlook report.”
In the six-month period from mid-November 2021 to mid-May 2022, there were 343 announced transactions with $15.4 million in announced deal value, along with two mega-deals. According to the report, the largest of these mega-deals was Berkshire Hathaway’s announced $11.6 billion acquisition of Alleghany Corporation.
Of the 343 announced deals in the first half of 2022, 91% (313) were brokerage target companies, with the remaining 9% of deals in the underwriting space.
The 2022 first-half numbers are down 28% in transaction volume from the previous six-month period, in which there were 476 announced transactions and $31.4 billion in deal value.
Despite this decline, PwC’s report predicts the second half of 2022 will be more active than the first, and specifically references several key deal drivers that could affect dealmaking trends going forward, including:
- Competition for assets and capital efficiency
- The uncertainty of rising inflation and interest rates
- A lag in the broader market valuations of insurtech could make some acquisitions more attractive to those looking to increase their technological capabilities.
- Global tax legislative developments could complicate the deals market – affecting deal pricing and operating models.
A full copy of PwC’s “Insurance: Deals 2022 midyear outlook report” can be found here.