Magazine

Read the latest edition of AIR and MEIR as an Interactive e-book

Mar 2024

Bermudian insurers question long-term benefits of M&A

Source: Asia Insurance Review | Aug 2015

Insurance executives in Bermuda have questioned the long-term benefits of the current spate of mergers and acquisitions in the reinsurance and insurance market, according to a white paper issued by London-headquartered Xuber, a provider of specialist end-to-end insurance management software solutions and systems.
   Faced with a raft of challenges such as third-party capital, soft market conditions and impending regulation around the globe, the (re)insurance industry on the island has been consolidating. Deals have been announced between some of the biggest players in the market and some of the well-known names are disappearing fast.
   The white paper documented the views of a group of executives in Bermuda who discussed market conditions, innovation, technological change and analytics.
   Hamilton Re Chief Underwriting Officer Claude Lefebvre said that M&A is part of a cycle and tends to take place during a soft market. However, the latest round of activity seems to beg the question of whether bigger is actually better.
   Meanwhile, Mr Robert Johnston, President at Aon Benfield Bermuda, said: “I’m not sure that being a company with US$10 billion of capital necessarily provides access to much more business than being a $5-billion-sized company, but in a merger situation, it’s not just about scale – it’s also about creating efficiencies and widening the scope of your resources and capabilities.”
   Mr Brad Adderley, a Partner at Appleby, questioned the number of M&A deals that actually increased shareholder value. “I understand an M&A deal when you buy a company with a book of business that you didn’t have access to, but I’m waiting to see if mergers of like-for-like companies in the end really make sense for the shareholders.”
   An interesting comment put forth by Catlin Group founder Stephen Catlin is that the current wave of consolidation is “seemingly putting smaller companies under pressure to choose a dance partner before the music stops”. He said that consolidation was inevitable so “why wouldn’t you be on the front foot and be proactive - and choose the partner you want?”
 
| Print
CAPTCHA image
Enter the code shown above in the box below.

Note that your comment may be edited or removed in the future, and that your comment may appear alongside the original article on websites other than this one.

 

Recent Comments

There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.