Asia Pacific saw the biggest gains year-on-year in insurance M&A deals last year, with 59 completed deals, up from 42 in 2017, with such activities accelerating through the year, says legal firm Clyde & Co in a new report. The number of deals in the region increased by 40.5% during the year.
The report, titled “Navigating a course between uncertainty and opportunity – Insurance growth report 2019” said that there were 34 deals completed in the second half of 2018, following 25 in the first half.
In comparison, insurance M&A deals in other parts of the world last year included 189 in the Americas (+7.3%); Europe, 122 (+3.4%); and MEA, 8 (-27.3%). Globally, there were 382 completed M&As in the insurance sector in 2018, up by 9.1% from 350 in 2017.
Regional focus set to shift
The report says that 2019 will be marked by shifting trends in terms of cross-border M&A. With a diminishing number of potential targets, deal-making in Bermuda could fall, especially at the top end of the market. In contrast, regulatory change across the Middle East points towards a long-expected pickup in transactions.
Deal-making in the Americas dipped in the second half of 2018, a trend that is likely to continue in the coming months. This is partly due to the natural cycle of the market, but also because of a heightened sense of caution in the market. In Europe, Brexit uncertainty is at a peak and Clyde & Co expects M&A in the region to see a temporary dip in the first half of 2019.
However, Asia-Pacific is likely to be the most active region with a continued increase in both inbound and outbound M&A. Underpenetrated markets still offer attractive growth prospects for foreign investors while re/insurers based in Japan, China and increasingly South Korea will look further afield for acquisition targets. A