There were 382 mergers and acquisitions in the insurance sector that were completed in 2018, from 350 in 2017, but 2019 may see a slowdown in pace, according to a report released on Friday from Clyde & Co LLP.
There were 18 transactions valued at $ 1 billion or more in 2018 compared to 16 in 2017, the report reported.
The business area in America increased to 189 from 176 in 2017 and increased in the Asia-Pacific region to 59 from 42 in 2017 as deals in the Middle East and Africa fell to eight from 11, the report reported.
In America, the volume increased from 97 in the first half of 2018 to 92 in the second half, the first decrease in business volume in two years, Clyde said in London.
Although the data showed a braking, other factors can support an active business environment in 201
"While we predict a slowdown in M&A in some markets in the first half of 2019, the second half could see a retreat to form," Clyde said. "With clarity around Brexit finally achieved, the disturbance that follows will create opportunities, especially in the drainage market."
Market conditions will also play a role. "At the same time, with no significant hardening of the market on the horizon, we expect the need to divest non-core assets," Clyde continues.
In addition, driving the market is that mergers and acquisitions are a "key strategy" Used by companies in the insurance sector to both increase the premium income and reduce the cost base, Clyde says.
"The worldwide transaction business was great in 2018," said Andrew Holderness, global director of Clyde & Cos's insurance group, in a statement released with the report. "But factors such as Brexit, trade war and protectionism give rise to uncertainty, business finance enemy."
"The slowdown in North America in the second half of last year is an indication of increased caution for investors and we predict 2019 will be a year of two halves – a slowdown in M&A in some markets over the first six months, while the other half will see a return to form, "he added.
Clyde & Co Insurance Growth Report is the report based on interviews with Clyde & Co partners around the world in December and January, supplemented with existing third-party research on mergers within insurance companies.