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The insurance sector M&A activity is accelerating: PwC



Insurance business activity has accelerated during the second half of the year and is expected to remain strong into 2022 as investors continue to see the sector as an opportunity, PricewaterhouseCoopers LLP said in a report on Thursday.

From the end of June. As of mid-November, there were 249 announced transactions, with $ 34.2 billion in announced transaction value, as interest from private equity, asset managers and companies in the sector remained high.

in the sector, a trend that is expected to continue.

“When large brokerage firms seek economies of scale, we also expect to see a continued consolidation of the insurance brokerage space that drives business. This consolidation has led to high multiples for insurance brokerage targets and shows no signs of ceasing, says PwC.

Recently completed major deals include Chubb Ltd.'s announced acquisition of Cigna's operations for life, accidents and additional benefits in Asia Pacific. and Covéa Mutual Group Insurance Co.'s announced acquisition of PartnerRe Ltd. for $ 9 billion.

"Given the record levels of venture capital, we expect competition for insurance company objectives and settlement blocks to remain strong, ongoing consolidation of brokerage firms to continue at a rapid pace, and interest in InsurTechs to remain high," said PwC.

The combination of insurance companies looking for "opportunities to sell non-core assets to free up capital and refocus their efforts on core competencies" and "want private equity and asset managers who want to increase assets under management in a cost-effective way" is another catalyst. for business, said PwC.

Potential headwind for further inv. The assessment includes increased legislative scrutiny and "political uncertainty," including attempts by U.S. lawmakers to introduce changes to tax laws by the end of this year.

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