Distribution offerings will continue to drive mergers and acquisitions in the insurance industry as technology also provides opportunity, according to a report Thursday from consulting firm PricewaterhouseCoopers LLP.
"Distribution agreements have driven the majority of M&A volumes in recent years," says PwC, adding "We expect current trends to continue until 2021."
Competition for acquisition targets is expected to increase as both strategic business entities and private equity players try to use capital in the sector, says PwC, as capital from both corporate investors and private equity buyers seems to benefit from the hardening interest rate environment in real estate / accident specialty lines.
"We expect this to continue with increased interest in acquiring specialist brokers, managing general agents and managing general insurers as investors looking to capitalize on sectors experiencing rising prices," says PwC.
Technology is another area that attracts investment, PwC said.
"InsurTech continues to present attractive investment and acquisition targets for large insurance companies," said PwC.
In addition to mergers and acquisitions and private equity increases, PwC said it expects insurtech companies to continue raising capital through IPOs, as software provider Duck Creek Technologies Inc. did in August. Catalog