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Global insurance M&A at lowest volume in two years - Clyde & Co

Source: Asia Insurance Review | Sep 2017

Global M&A

The volume of completed mergers and acquisitions (M&A) worldwide in the insurance industry continued its downward trend as insurance businesses continue to pursue a range of routes to growth, according to the Clyde & Co Growth Report mid-year update. Activity is down 24% to 170 deals in the first six months of 2017 compared to 186 in the preceding period and significantly down from 1H 2015 result of 225 deals. 
 
   Activity in Europe is down 28% in the past six months, in part due to the distraction of Brexit, while completed M&A deals in the Asia Pacific fell to 22 from 36 in the second half of 2016, partly due to temporary monetary controls in place in China. 
 
   The Middle East and Africa saw a slight uptick in M&A, albeit from a low base, with eight deals compared to just two in the prior period. Activity was also up in the Americas, with 86 transactions so far this year, compared to 81 in the preceding six months. 
 
Optimistic outlook
As markets become less exposed to political and economic uncertainty, the volume of M&A is expected to stabilise or rebound in the second half of the year as insurers continue to drive for growth and new sources of value. 
 
   Mr Andrew Holderness, Global Head of the Corporate Insurance Group, said: “Deals are still getting done and a merger or acquisition remains an attractive route to generating value. While insurers continue to consider all the tools at their disposal in the quest for growth, there is good reason to expect that more M&A will get over the line in the coming six months.” 
 
   He added: “Hot-spots for deal making are likely to include China, where the regulatory environment is expected to ease, allowing a pent-up wave of M&A activity to resume, while overseas expansion as evidenced in the acquisition earlier this year of Singapore’s Asia Capital Re by a China-based consortium is set to continue.” A 
 
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