Q1 sees eight mergers, acquisitions worth $26.9B in insurance sector
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The first quarter of 2018 saw eight announced mergers and acquisitions in the insurance sector worth a total of $26.9 billion, according to a study from PricewaterhouseCoopers L.L.P., a report from the consultancy said Monday.
The report titled PwC Deals: U.S. Financial Services Deals Insights Q1 2018, said there were 423 deals announced in first-quarter 2018 worth a total of $73.2 billion sector-wide in financial services, including asset and wealth management, banking and capital markets, and insurance, 35% higher than the same period last year, the report said.
The $26.9 billion of insurance deals in the first quarter dwarfs the $5.7 billion from first-quarter 2017 as insurance deal values soared on what PwC called “megadeals… primarily…AXA’s announced acquisition of XL Group for $15.4 billion and AIG’s announced acquisition of Validus for $5.6 billion,” the report said.
Tax reform may help spur further deal-making as the “impacts of tax reform are becoming clearer, which may encourage deal activity the remainder of the year,” the report said.
The sale by insurers of variable annuity legacy blocks may also have an effect on insurance mergers and acquisitions, the report said.
“Board members and C-suite executives at many insurance companies have been more recently focused on these legacy blocks and are giving serious consideration to divesting them,” the PwC report said. “In most of these divestitures, the announcements were well received and sellers were rewarded via significant increases in their market capitalization.”
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