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Insurance M&A deals edge down in first half


Worldwide insurance merger and acquisition activity slipped slightly in the first half of 2021 with 197 deals compared with 201 for the same period last year, according to a report released Tuesday from law firm Clyde & Co.

Although hardening insurance and reinsurance markets are driving organic growth for insurers, “cheap liquidity, growing private equity interest, and the restructuring of large carrier portfolios is presenting plenty of M&A opportunities for strategic buyers of insurance assets,” the report said.

Larger deals dominated in the first half with 11 deals over $1 billion, compared with 15 big deals during all of 2020. The sale of London-based RSA Insurance Group PLC to a unit of Toronto-based Intact Financial Corp. for $9.2 billion was the was the largest.

“Despite the challenges of the last 18 months, the insurance industry has responded well and demonstrated a remarkable degree of resilience when it comes to getting deals over the line,” Ivor Edwards, partner and European head of the corporate insurance group at the law firm, said in a statement.

Geographically, the Americas saw the most activity with 116 deals, up from 102 in the second half of 2020. Europe saw 51 deals in first half, up from 50 in the same period last year.

Asia-Pacific saw a steep drop 18 deals from 37 last year, the lowest level since Clyde began tracking M&As. The Middle East and Africa also saw a steep decline in deals to 5 from 32.

Mergers and acquisitions are also being generated as insurers realign their businesses.

The realigning of businesses will feed a loop of disposals and purchases “driven by … insurers seeking to divest noncore business in order to build up a war chest for future acquisitions or otherwise wanting to focus on their core lines and businesses,” Clyde said.

Companies are selling legacy books of business and generating capital for acquisitions, said Vikram Sidhu, a New York-based partner with Clyde & Co.