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Insurer M&A value hits $2.9 billion in second quarter: PwC

Insurer M&A

Disclosed deal value among insurers rose to $2.9 billion across 129 deals during the second quarter of 2019, according to a report Thursday from PricewaterhouseCoopers International Ltd.

The number of deals is a 22% decline from this year’s first quarter, but the deal value is severalfold larger than the $100 million from that period.

Two large transactions accounted for 83% of the disclosed deal value during the second quarter, PwC said.

American Family Insurance Mutual Holding Co. agreed to acquire Ameriprise Financial Inc.’s Ameriprise Auto & Home insurance business for $1.05 billion, and Principal Financial Group Inc. announced a $1.35 billion acquisition of Wells Fargo & Co.’s Institutional Retirement and Trust business, the largest deal of the second quarter.

Deals involving insurance brokers, usually small, privately held businesses that disclose few details about the transactions, comprised 93% of deal volume during the second quarter, the report said. “Consolidation of distribution and insurance intermediaries continued to fuel dealmaking during the second quarter, pushing up transaction volume.”

Property/casualty transactions accounted for 5.4% of deals, and life and retirement accounted for 1.6%, the report said.

Looking forward, insurers will continue to reassess potential divestitures of noncore businesses as such transactions can free up capital for reinvestment in growth and operational optimization and ultimately, help improve return on investment and meet shareholder expectations, the report said, adding buyers will also remain.

“Investors, including firms backed by private equity, continue to offer opportunities for insurers to exit legacy holdings that are capital intensive or outside their primary lines of business,” the report said.




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