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Home / Insurance / The total value of the insurance industry's M&A rises sharply during the first quarter

The total value of the insurance industry's M&A rises sharply during the first quarter



Mergers and acquisitions involving U.S. and Bermuda-based insurance companies in the first quarter produced a total business value of $ 21.16 billion, according to a report Monday by S&P Global Market Intelligence.

The first quarter of the year peaks the full-year agreement for 2019 and 2020.

"The insurance company's M&A activity seems to be at least twice as much in 2021 and may be one of the strongest years in the last quarter," said S&P.

The report also noted Chubb Ltd's $ 23 billion offer for Hartford Financial Services Group Inc., which Hartford rejected as insufficient, and American International Group Inc.'s planned separation of its life and retirement operations.

Should Hartford finally agree to a 2021

sale and AIG find a partner to invest in the life and pension industry, S&P estimates the total transaction value at $ 71.65 billion, an increase of 269.5% from 2020. [19659002] Alternatively, if a deal for Hartford do s does not happen and AIG chooses a life and retirement IPO, this year's insurance company could offer a total of $ 40.55 billion, a smaller 109.1% increase from 2020.

Despite the strong total amounts, the transaction value of real estate / accidental transactions has dropped to its lowest point in a first quarter since 2013 of just $ 923.5 million. of the previous ten years to the announced total of the first quarter. The high fall of $ 38.94 billion in activity presupposes a sale of Hartford at a price that corresponds to the actual book multiple that Ace Ltd. agreed to pay in the 2016 acquisition of Chubb Corp. which was 1.855x.

The two largest first-quarter P / C deals, according to a S&P spokeswoman, were Mayfield Village, Ohio-based The Progressive Corp. acquisition of $ 338 in February of Carmel, Indiana-based Protective Insurance Corp., and $ 586 million in January to take Morristown, New Jersey-based specialty insurance company ProSight Global Inc. privately, of TowerBrook Capital Partners LP, which is based in London and New York, and New York-based Further Global Capital Management LP.

Brokerage / agency consolidation activity measured by the number of transactions with US targets decreased by 18.2% compared to the same period last year during the first quarter.

Year-round activity in the sector will top 600 transactions for the fifth year in a row given that private equity-backed buyers are still looking for acquisitions, S&P said. However, its forecast for 2021 business expects a decrease of approximately 11.4% from a total of 699 transactions by 2020 and is dependent on President Joe Biden's plan to revise the US tax law.

President Biden announced a proposal on March 31 to increase the corporate tax rate to 28% from 21%, indicating that he would "present further ideas in the coming weeks" concerning private individuals. Catalog

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