Global Property-Casualty Insurance M&A in 2020: The Show Must Go On
This study, Conning’s 31st annual in-depth analysis of global insurance M&A (mergers and acquisitions), reviews insurance property-casualty M&A transactions announced in 2020 and 2021 through early March. The analysis covers acquisitions of property-casualty insurers, insurance agents and brokers (including MGAs—managing general agents—MGUs—managing general underwriters—and program administrators), and insurance service providers.
1. Introduction
2. Executive Summary
3. Insurance M&A Market Overview
² Overview
² Key M&A Drivers in 2020
² Key M&A Themes in 2020
² 2021 Outlook
4. Key Transactions in 2020 Property-Casualty Insurance M&A
² A Big Year
² Valuations
5. Themes in 2020 Property-Casualty M&A
² Distress
² Runoff
² Specialty
² Reinsurance—Some Deals, Many Startups
² Private Equity Acquirers
² Technology
² Lloyd’s—The Culling Continues
² Acquisitions of Mutual Insurers
² Non-North America Property-Casualty M&A
² Property-Casualty 2021 M&A Outlook
6. Insurance Distribution M&A in 2020
² The Collapse and the Rebound
² Significant Insurance Distribution Transactions Announced in 2020
² Private Equity Buyers
² Aggregators Keep on Aggregating
² U.K.
² Canada
² Valuations
² Deal Count by Insurance Sector
² MGAs and MGUs—Hotter Than Ever
² Bank Activity Downshifts to First Gear
² Outlook for Property-Casualty Distribution M&A
7. Insurance Services M&A in 2020
² The Appeal of Insurance Services
² Buy or Build?
² Insurance Technology
² Claims Adjusters/TPAs
² Outlook for Services M&A
Appendix
Introduction
Key Takeaways
§ There was surprisingly vigorous capital market activity involving property-casualty insurers in 2020, notwithstanding obstacles to dealmaking created by the pandemic. There were some sizable M&A transactions, IPOs, and an announced restructuring/potential IPO at an industry giant, AIG. One deal that got derailed because of the pandemic was Covèa’s attempted $9.0 billion takeover of PartnerRe.
§ Private equity interest in the insurance sector was strong, evidenced by substantial flows into startups and scale-ups as well as continued investment in intermediaries.
§ The run-off market was active in 2020. There were acquisitions of run-off firms, legacy transactions, and growing involvement by new players, such as Premia and Marco.
§ Consolidation in the insurance agent and broker world continued, with even more U.S. transactions in 2020 than in 2019. Private equity-backed aggregators and retail agents seeking scale drove much of the activity.
§ The demonstrated value of insurance service providers, especially in the IT space, drove numerous acquisitions of insurance technology providers.
This study, Conning’s 31st annual in-depth analysis of global insurance M&A (mergers and acquisitions), reviews insurance property-casualty M&A transactions announced in 2020 and 2021 through early March. The analysis covers acquisitions of property-casualty insurers, insurance agents and brokers (including MGAs—managing general agents—MGUs—managing general underwriters—and program administrators), and insurance service providers.
Transactions covered include acquisitions of operating companies as well as significant transactions where there is change of control or significant market impact. The study identifies salient drivers and themes in the M&A record. Changes in M&A drivers and themes reflect broader trends in the industry, at management teams, and at stakeholders.
M&A activity is a useful leading indicator of broader industry trends. It is, therefore, instructive for strategic planners at insurers, brokers, and for investors to follow developing M&A activity, dynamics, and themes for insights into market segments.
Our analysis is based on Conning’s global database of publicly announced transactions, supplemented by direct communication with acquirers whose acquisitions are not publicly announced.