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March 17, 2016

Global insurer M&A deal values reached $195B in 2015

A new study shows the aggregate value of global insurance transactions in 2015 was four times higher than in 2014, while the number of $1 billion-plus transactions was three times higher.

That’s according to a new study by Hartford-based Conning Inc., an investment management company for the insurance industry. It said record-setting global mergers and acquisitions activity in 2015 was characterized by an unprecedented number of high-value strategic transactions.

The Conning study said close to half of the billion-dollar-plus deals were outbound transactions by Japanese and Chinese buyers, as the Japanese sought external growth opportunities and the Chinese pursued asset accumulation and diversification strategies. Four consolidation deals among U.S. health insurers alone, valued at $100 billion, accounted for more than half of the global insurer mergers and acquisitions value.

"M&A activity in 2015 was driven by continued low interest rates, high levels of industry capital, and low-growth economies in developed countries," said Steve Webersen, Conning’s head of insurance research. He said in spite of many of those issues being in place for quite some time, they came to a head in 2015, as insurers capitulated to the need for acquisitions to spur growth. “Looking forward, the transformative consolidations of 2015 may pressure other competitors to merge, and may also provide opportunities for mid-market players as certain components of the merged businesses are spun off and talent is displaced," Webersen added.

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