April 13, 2005

Conning Research: More Insurance M&A Deals in 2004, But Dollar Values Drop

• Industry still not highly concentrated, but continuing to consolidate

(Hartford, CT) April 13, 2005 - The total number of mergers and acquisitions (M&A) in the insurance industry increased in 2004, driven by the health/managed care and distribution sectors, according to a new study by Conning Research and Consulting, Inc. The M&A transaction total rose over the prior year for the first time since 2001.

However, a lack of mega-merger deals of $10 billion or more in any sector left the total transaction values under $15 billion-the second lowest in 10 years. Despite the lack of giant deals, industry sectors continued a slow but noteworthy progression toward consolidation.

"More M&A activity is likely to stimulate more and larger transactions, but projecting the when, where, and why requires a deep examination of the conditions in the individual sectors," said Clint Harris, analyst at Conning Research and Consulting. "Certainly, we found consolidation plays in the health/managed care sector, but we also identified them in the property-casualty and life sectors. They may seem less dramatic than the mega-mergers in 2003 and 2005, but these smaller deals are definitely shaping the industry environment."

The Conning Research study, "Mergers & Acquisitions and Public Equity Offerings-2005 Edition," presents detailed information on transactions, valuations, and deal intent. Further, for the first time this annual study also includes the results of a CEO survey on M&A intentions for the forthcoming years.

"Our analysis of insurance industry M&A spans many years, and while we have seen significant transactions in the various sectors over time, the industry remains highly fragmented and still very ripe for consolidation," said Stephan Christiansen, research director at Conning Research & Consulting. . "The 2004 transaction activity did more to reshape individual subsegments in the market than to increase industry concentration, but we anticipate continued consolidation in the coming years, as companies strive for market position in the face of accelerating competition."

"Mergers & Acquisitions and Public Equity Offerings-2005 Edition" is available for purchase from Conning Research & Consulting, Inc., by calling (888) 707-1177 or by visiting the company's Web site at www.conningresearch.com.

About Conning Research & Consulting, Inc.
The Conning name has represented excellence in independent insurance industry research for more than 90 years. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and can provide in-depth insights and analyses. Conning provides both public and proprietary research as well as consulting services to the financial services industry. Conning is headquartered in Hartford, CT.

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