Mergers and acquisitions (M&A) in the global insurance industry rose in the first half of 2018 with 186 completed deals worldwide, up from 180 in the second half of 2017, according to Clyde & Co’s Insurance Growth Report mid-year update, released today. This marks the second consecutive six-month period of modest increases in the volume of transactions since the low point in H1 2017 that followed two years of steady decline.
Activity in the Americas was up, with 97 deals in H1 this year, compared to 90 in the preceding six months, with the strengthening economic outlook a key driver in the US, in addition to shifting reinsurance market fundamentals in Bermuda. Asia Pacific saw an uptick in deals from 20 to 25 with Japanese acquirors accounting for the lion’s share, ahead of Australia and Taiwan. Activity in the Middle East and Africa remains subdued with just four deals in H1 2018, slightly up on the three completed in the previous six months. Europe was the only region to see a decline in M&A with 59 deals, down from 65 in H2 2017, with the overhanging uncertainty around Brexit continuing to act as a brake on activity.
Andrew Holderness, Clyde & Co, Global Head of Corporate Insurance says: “After a sustained period of sliding M&A volumes that bottomed out in the first half of 2017, the first green shoots of recovery that we saw at the turn of the year are now taking root. The characteristics of the operating environment haven’t changed – the market remains uber-competitive and generating growth a perennial challenge – so M&A can provide potential synergies on reducing the cost base, build scale and access new customers. Deal-makers are feeling renewed confidence, buoyed by strengthening economies in the US and Asia, greater regulatory certainty in China and the Middle East, and the need to pick up the pace in Europe as the risk of a chaotic Brexit looms large.”