Insurance coverage M&A offers edge down in first half

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Worldwide insurance coverage merger and acquisition exercise slipped barely within the first half of 2021 with 197 offers in contrast with 201 for a similar interval final yr, in line with a report launched Tuesday from legislation agency Clyde & Co.

Though hardening insurance coverage and reinsurance markets are driving natural progress for insurers, “low-cost liquidity, rising personal fairness curiosity, and the restructuring of enormous service portfolios is presenting loads of M&A alternatives for strategic consumers of insurance coverage property,” the report mentioned.

Bigger offers dominated within the first half with 11 offers over $1 billion, in contrast with 15 massive offers throughout all of 2020. The sale of London-based RSA Insurance coverage Group PLC to a unit of Toronto-based Intact Monetary Corp. for $9.2 billion was the was the most important.

“Regardless of the challenges of the final 18 months, the insurance coverage trade has responded nicely and demonstrated a exceptional diploma of resilience with regards to getting offers over the road,” Ivor Edwards, companion and European head of the company insurance coverage group on the legislation agency, mentioned in a press release.

Geographically, the Americas noticed probably the most exercise with 116 offers, up from 102 within the second half of 2020. Europe noticed 51 offers in first half, up from 50 in the identical interval final yr.

Asia-Pacific noticed a steep drop 18 offers from 37 final yr, the bottom degree since Clyde started monitoring M&As in 2009. The Center East and Africa additionally noticed a steep decline in offers to five from 32.

Mergers and acquisitions are additionally being generated as insurers realign their companies.

The realigning of companies will feed a loop of disposals and purchases “pushed by … insurers looking for to divest noncore enterprise so as to construct up a warfare chest for future acquisitions or in any other case eager to deal with their core strains and companies,” Clyde mentioned.

Corporations are promoting legacy books of enterprise and producing capital for acquisitions, mentioned Vikram Sidhu, a New York-based companion with Clyde & Co.

 

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