There were 186 mergers and acquisitions in the global insurance industry during the first half of 2018 compared with 180 in the second half of 2017, according to Clyde & Co’s Insurance Growth Report midyear update, issued Tuesday.

The first half of 2018 was the second consecutive half year of a “modest” increase in deal volume since a low point in 2017 following two years of steady decline in deal volume, the London-based law firm said in its update.

Roughly half the deals, 97, were in the Americas, compared with 90 during the preceding six months, according to the report.

There were 25 deals in the deals in the Asia-Pacific region, up from 20 in the preceding six months, the report said, while Europe saw a decline to 59 deals from 65 in the second half of 2017. The Middle East and Africa saw four deals in the first half of 2018, up from three in the preceding six months.

Strong U.S. economic growth and lower federal corporate tax rates will help drive deals for the next six to 12 months, according to Vikram Sidhu, partner at Clyde & Co in New York, while “relentless competition and pricing pressure in many lines continue to motivate M&A deals in the insurance sector,” he said in the update.

Pricing has become more contentious, he said, leading to longer negotiations. “Potential buyers are refusing to accept the especially high valuations that sellers have demanded recently,” Mr. Sidhu said in the update. “Instead of preventing deals, this shift is likely to delay deals as parties negotiate more aggressively over pricing.”

Meanwhile, “It is proving increasingly difficult to remain relevant as a large monoline reinsurer,” according to Andrew Holderness, Clyde & Co’s global head of corporate insurance. “As a result, Bermudan businesses continue to be put up for sale or look to diversify by acquiring new underwriting assets themselves,” he said in the update.

China and the Middle East are expected to contribute to new deal growth, the report said.

“There are already clear signs of increased M&A in the Middle East with the expectation of more to come,” Peter Hodgins, Clyde & Co’s corporate insurance partner in Dubai, United Arab Emirates, said in the update.

“We also expect a significant increase in M&A in China — the world’s second largest insurance market — where deals have effectively been on hold for the past two years due to an ongoing period of regulatory uncertainty,” added Michael Cripps, a consultant to Clyde & Co Westlink JLV.