2010: Global Insurance Mergers & Acquisitions in 2009 - Still Sitting on the Bench
Conning’s annual study examines insurance industry mergers & acquisitions and public equity offerings—both U.S. and non-U.S.—for 2009 and historically. This comprehensive global insurance M&A analysis provides a listing of transactions announced in 2009 and in early 2010. It explores observed, emerging or expected trends within and across five insurance sectors—property-casualty, life-annuity, health/managed care, insurance distribution, and insurance services.
1. Introduction
2. Executive Summary
3. An Overview of Global Insurance M&A in 2009
- The Global Environment for Insurance M&A
- Global Mergers and Acquisitions in All Industries
- Insurance Industry M&A Trends—U.S.
- Private Equity
- Insurance Industry Trends—Non-U.S.
- Themes
- Outlook for 2010
- AIG Breakup
- 2010 Global Insurance M&A Announcements
- Summary
4. Property-Casualty Insurance Sector Analysis
- Introduction
- AIG Assets and Japanese Consolidation
- Comparison with 2008
- U.S. Property-Casualty M&A
- Global M&A
- Lloyd’s
- Largest Property-Casualty Acquisitions
- Multiple Acquirers
- Property-Casualty Initial Public Offerings in 2009
- 2010 Property-Casualty M&A Transactions Announcements
- Summary
5. Life-Annuity Insurance Sector Analysis
- Introduction
- U.S. Life-Annuity M&A: Still at Record Lows
- Largest Life-Annuity Acquisitions
- Multiple Acquirers
- 2010 M&A
- Summary
6. Health/Managed Care Insurance Sector Analysis
- Introduction
- Global Health/Managed Care M&A: A Marketplace on Hold
- Largest U.S. Transactions—Health Insurance and Managed Care
- Largest Non-U.S. Transactions—Health Insurance and Managed Care
- Multiple Acquirers
- 2010 M&A
- Summary
7. Insurance Distribution Sector Analysis
- Introduction
- Trends in 2009 Insurance Broker/Agent M&A
- Smaller Acquisitions
- Private Equity Driven Out by Debt Drought
- Banks Unloading Insurance Entities
- Fall in Valuations
- Non-U.S. Insurance Distribution M&A Trends
- Insurance Distribution Transaction Drivers in 2010
- Largest Distribution Acquisitions
- 2010 Insurance Distribution M&A Transaction Announcements
- Summary
8. Insurance Services Sector Analysis
- Introduction
- Multiple Acquirers of Insurance Service Providers
- U.S. Insurance Services M&A Transactions: Increased Activity
- Largest Insurance Services Acquisitions
- 2010 Insurance Service M&A Transaction Announcements
- Summary
Appendices
A. Criteria for Inclusion in Merger & Acquisition Database
B. Series of Recurring M&A Studies
C. Historical Summary Data
D. 2008 Mergers & Acquisitions by Sector
Introduction
Review and analysis of 2009 insurance mergers and acquisition (M&A) transactions reveal themes characterizing the industry at the tail end of a cataclysmic financial crisis. The overall sound was in a minor key, and many sour notes were heard. In a “normal year,” M&A is driven by the traditional motivator of seeking growth through geographic and product expansion by buying companies. Tradition was abandoned in 2009, as insurance M&A in 2009 was dominated by distress deals made of necessity, and by defensively driven combinations to achieve scale to reduce expenses in an exceptionally cost-conscious environment. However, cool-headed acquirers with available capital shrewdly took advantage of low valuations, selectively making acquisitions. Our 2010 study of the prior year’s insurance M&A activity, Conning’s 19th such in-depth analytical yearbook since 1989, reviews global M&A activity, analyzes motivations, and sheds light on future directions for planners to understand competitors’ moves, as they chart their own.
Recognizing the global interconnectedness of the insurance industry with respect to capital mobility, reinsurance, premium potential, and exposures, Conning expanded its analysis of insurance M&A in 2007 to encompass activity taking place outside the U.S. In retrospect, our decision was a wise one, if only because in 2009 U.S. entities as buyers or sellers accounted for only 27% of worldwide global insurance M&A activity, when measured by total transaction value.
Analysis of merger and acquisition activity provides a window into companies’ strategic thinking. On the buy side, it is an indication of business segments deemed to hold promise of growth potential, deserving of capital allocation. On the sell side, it furnishes evidence of business lines considered worthy of exiting.
Conning’s comprehensive global insurance M&A analysis provides a listing of transactions announced in 2009 and in early 2010. It explores observed, emerging, or expected trends within and across five insurance sectors—property-casualty, life-annuity, health/managed care, insurance distribution, and insurance services.