Worldwide insurance mergers and acquisitions decreased slightly in the first half of 2021 by 197 transactions compared to 201 for the same period last year, according to a report released Tuesday by law firm Clyde & Co.
Although insurance and reinsurance markets drive organic growth for insurance companies, "cheap liquidity, growing private equity interest and the restructuring of large carrier portfolios offer many M&A opportunities for strategic buyers of insurance assets," the report said.
Larger deals dominated in the first half of the year with 11 deals over $ 1 billion, compared to 15 big deals throughout 2020. The sale of London-based RSA Insurance Group PLC to a unit in Toronto-based Intact Financial Corp. for $ 9.2 billion was the largest.
“Despite the challenges of the last 1
Geographically, it was America's most activity with 116 stores, an increase from 102 in the second half of 2020. Europe had 51 stores in the first half, an increase from 50 during the same period last year.
Asia-Pacific fell sharply 18 deals from 37 last year, the lowest level since Clyde began tracking M & As in 2011. The Middle East and Africa also saw a sharp drop in business to 5 from 32.
Mergers and acquisitions are also generated when insurance companies adapt their operations.
The conversion of companies will result in a loop of divestments and acquisitions "driven by … insurance companies seeking to divest non-core business to build a coffin for future acquisitions or otherwise want to focus on their core lines and business , says Clyde.
Companies sell old business books and generate capital for acquisitions, says Vikram Sidhu, a New York-based partner with Clyde & Co.