Global Property-Casualty Insurance M&A in 2019 - Distribution Dominates
Conning: While P&C Distribution M&A Flew High in 2019, Insurer Acquisitions Slowed
- Global P&C distribution deal counts set another record in 2019
- Multiple factors were at play that kept insurer acquisitions down last year
- This trend will be exacerbated in 2020 with COVID-19 putting the brakes on most insurer M&A
HARTFORD, CT – April 13, 2020 – In 2019, M&A activity involving acquisitions of property and casualty insurers slowed considerably from 2018, down approximately 6% compared to the prior year. That’s in stark contrast to the distribution acquisition market that sustained strong interest from consolidators as well as private equity investors throughout 2019.
“Multiple factors dampened the M&A environment for property and casualty insurers in 2019,” said Jerry Theodorou, a Director, Insurance Research at Conning. “A firming pricing climate helped fuel premium expansion lessening the need for inorganic growth, concerns over reserve adequacy kept buyers from making acquisitions, and targets have become more expensive, especially the higher quality organizations.”
The Conning study, “Global Property & Casualty Insurance M&A in 2019: Distribution Dominates” tracks and analyzes U.S. and non-U.S. property and casualty mergers and acquisitions activity for insurers, distributors, and service-related firms. Specific transactions are detailed, and trends are analyzed across all segments.
“While the property and casualty insurer M&A sector took pause, the distribution acquisition market maintained its blistering pace” said Steve Webersen, Head of Insurance Research at Conning. “There were no large strategic broker deals in 2019, however, private equity and private equity-backed brokers remain highly active in this space. This upward trajectory in deal count is expected to persevere as buyer demand continues to be high.”
Many P&C insurance companies began 2020 in good financial health. Although the impact from the COVID-19 pandemic has dampened industry enthusiasm, the P&C industry is already repositioning itself to respond dynamically to the various challenges it now faces from a potentially extended period of economic slowdown. “With the duration of this turmoil difficult to predict, we expect insurance-related M&A will experience inactivity for some time,” commented Webersen.
“Global Property & Casualty Insurance M&A in 2019: Distribution Dominates” is available for purchase from Conning by calling (888) 707-1177 or by visiting www.conningresearch.com.
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Conning (www.conning.com) is a leading investment management firm with a long history of serving the insurance industry. Conning supports institutional investors, including pension plans, with investment solutions and asset management offerings, risk modeling software, and industry research. Founded in 1912, Conning has investment centers in Asia, Europe and North America.
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