Insurer enthusiasm growing for acquisitions: KPMG survey

Insurer interest in strategic acquisitions is on the upswing, according to a survey released by KPMG L.L.P. on Wednesday.

KPMG's “2014 Insurance Industry Outlook Survey” found that 54% of the 95 insurance industry executives surveyed said they expect to be involved as a buyer in a merger or acquisition in the next year. In KPMG's 2013 survey, only 34% gave the same response.

The most frequently cited drivers of M&A activity were “access to new markets and geographic areas” and “regulatory changes and pressures,” each cited by 45% of the executives. Access to new technology and products and improved use capital also were cited as drivers.

“M&A activity is expected to ramp up in the next year as insurers leverage their strong capital positions to seek profitable growth, enter new markets and rationalize noncore operations,” Laura Hay, New York-based national leader of KPMG's insurance practice, said in a statement. “P&C insurers are acquiring companies with enhanced technology platforms to gain a competitive edge and view M&A as a crucial means to increase their distribution capacity.”

The survey was conducted in the second quarter of 2014 and included executives from property/casualty, reinsurance and life insurance companies.