Global insurance M&A hits two-year low

The volume of completed mergers and acquisitions (M&A) worldwide in the insurance industry is down 24 percent from its recent high in H1 2015, according to the Clyde & Co Growth Report mid-year update.

Insurance M&A activity continued its downward trend with 170 deals in the first six months of 2017 compared to 186 in the preceding period.

Activity in Europe is down 28 percent in the last six months, in part due to the distraction of Brexit, while completed M&A deals in 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.

“Uncertainty is the enemy of deal-making,” said Andrew Holderness, global head of the corporate insurance group.

“M&A has risen in the Americas now that the uncertainty that plagued the market in the run-up to the US presidential election has eased somewhat. However, in Europe, uncertainty persists with Brexit acting as a significant brake on M&A activity. Transactions have been overtaken on the corporate agenda by Brexit preparations as companies realize that there is no time to lose. Elsewhere in Europe political and economic uncertainty in markets as far apart as Greece, Italy and Russia continue to weigh heavy on investor sentiment.

“Growth remains a shareholder imperative in an increasingly difficult trading environment, and insurers are investigating every avenue – both organic and inorganic – in an attempt to deliver this, wherever they are in the world,” Holderness added.

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