Overall M&A activity in the insurance industry is trending downwards this year, according to Clyde & Co, an insurance provider, which publishes regular reports on M&A dealmaking based on Thomson Reuters data. Deals are slow to get done due to “stubbornly soft” pricing – and overall the number of transactions has continued to decline as the bar chart here shows.
The report says that The US remains the most active country overall with 30% of global M&A activity, but in the last 12 months its activity has fallen by around 40%. Outside the US, Latin America continued to interest investors, with Brazil and Argentina leading the activity, with targets in Chile and Mexico proving to be attractive. Europe is the second most active region with deals in the UK actually increased in the last 12 months.
There were transactions in Spain, France, Germany and Italy, frequently driven by the ongoing problems in the Eurozone and fall-out from the global financial crisis, as insurers sold off non-core and sub-scale assets as part of turnaround programs.
Probably the most dominant trend in the deals, , according to Clyde& Co, that have taken place in the last year has been the search for growth – whether that is by expanding into those less mature markets with greater potential, or by diversifying through acquisition into new sectors or distribution channels.