Business activity in the insurance sector has slowed by almost a third in the first half of 2022 but is expected to turn around again, according to a report on Thursday from PricewaterhouseCoopers LLP.
During the six-month period from mid-November to mid-May, there were 343 announced transactions with a total value of USD 15.4 billion, compared to 476 announced transactions with a total value of USD 31.4 billion during the previous six-month period, a 28% decrease in transaction volume.
Business activity declined further in the second quarter of 2022, with only 27 announced deals from late March to mid-May, PwC said.
Brokerage transactions make up the majority of industry transactions, according to PwC. Of the 343 insurance transactions announced, 313 were brokerage firms, with the remaining 30 transactions in the insurance area.
However, the forecast for the second half of the year is that business activity will rise again.
“Although transaction activity declined in the first half of 2022 due to the overall economic environment, we expect business activity to recover in the second half driven by strong interest in the sector from PE-backed buyers,” PwC said in its report.
Buyers may turn up for life and long-term real estate and accident companies that have struggled to generate return on investment in a low interest rate environment, but may be able to rebalance portfolios and generate more sustainable revenue.
Renewed interest is also expected for insurtech, which has “underperformed overall stock markets”, said PwC.