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Oct 2019

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Global M&A activity at highest level in four years

Source: Asia Insurance Review | Sep 2019

A report by Clyde & Co has found that the level of activity in insurance M&A has been on a steady rise. The firm’s Insurance Growth Report shows there were 222 completed M&A deals worldwide in the first half of 2019 up from 196 in the second half of 2018. This represents a 13% increase in deals – the highest increase in the volume of transactions since the first half of 2015. The figure also represents the fourth consecutive six-month period of M&A growth.
 
North and South America saw the most activity, with 93 recorded deals, while Europe saw the largest increase, with a 40% rise in M&A activity represented by 88 completed deals in the first half of the year (compared to 64 in H22018). Of the European countries, France was leading in terms of insurance M&A activity and the second most active worldwide just behind the US. France is then followed by the UK and Spain.
 
“Despite recent signs of market hardening, delivering a positive result for shareholders remains challenging and M&A is an attractive strategy to deliver growth for re/insurance businesses around the world,” said Clyde & Co partner and European head of the corporate insurance group Ivor Edwards.
 
However, the report noted that the spike in European deals might be short-lived, as deal makers are likely to play it safe in the near future, in reaction to the economic uncertainty brought about by Brexit and the UK’s new leadership.
 
The report also included various statistics and insights:
  • There were 11 transactions in H12019 valued in excess of $1bn, compared to 18 in the whole of 2018 – but there is uncertainty about whether this trend will continue. The firm believes it might become increasingly difficult for buyers and sellers to agree on valuation with the limited pool of M&A targets at the top end of the market.
  • Cross-border M&A activity remains strong in H12019, with 63 deals representing 28% of the global total as re/insurers look to extend their reach into new territories.
  • Technology remains an important emerging driver of M&A; H12019 saw notable and sizable tech investments around the world. Examples include the $90m investment into InsurTech Singapore Life from Sumitomo Life in Japan, and the $45m investor group infusion into Paris-based software-as-a-service start-up Alan. A 
 
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