Global Insurance M&A Activity Declines Amid Economic Pressures

Global Insurance M&A Activity Declines Amid Economic Pressures

Mergers and acquisitions (M&A) in the global insurance sector declined in the first half of the year, with 103 deals compared to 171 in the same period last year, according to a report from law firm Clyde & Co. An article by Business Insurance says the drop in global insurance M&A activity is attributed to factors such as surging inflation, rising interest rates, high seller pricing expectations, and the increased cost of integrating technology systems. Despite this, six billion-dollar transactions were completed, with three in the US, two in Asia, and one in Europe.

The article shows that the US and Canada are leading in deal volume, with 40 combined, including the largest global deal: Brookfield Reinsurance’s $3.5 billion acquisition of American Equity Investment Life. The UK and Europe saw a decrease from 48 to 31 deals, while the Middle East experienced continued consolidation with five deals. The Asia Pacific region showed resilience as major Japanese insurers expanded regionally.

Although the overall M&A activity was the lowest since Clyde & Co. began reporting in 2021, the firm anticipates a potential market rebound later this year, driven by large-scale transactions. Eva-Maria Barbosa, a Munich-based partner at Clyde & Co., noted the likelihood of multi-jurisdictional deals involving major carriers acquiring businesses that span multiple countries.