Asia-Pacific attracting M&A activity from diverse market players

The Asia-Pacific region is experiencing mixed merger and acquisition trends in the insurance sector as buyers from “diversified backgrounds seek deals for a variety of purposes,” according to a report issued by A.M. Best Co. Inc.

The report issued Wednesday— “Asia-Pacific M&A Seen as More Balanced, Driven by Value Creation” — says that the region has been a “popular destination for merger and acquisition (M&A) activity, driven by top-line growth prospects for many still-developing markets with low insurance penetration.” But some insurers in the region’s advanced markets have looked outside the Asia-Pacific area in an effort to achieve diversification. In fact, the report says that some of the biggest global deals have involved Asian buyers entering mature Western markets, said Oldwick, New Jersey-based Best.

In addition, emerging markets such as Indonesia, Malaysia and Thailand have attracted both Asian and Western buyers.

“A critical factor for successful M&A is creating long-term value, particularly in the dynamic Asia-Pacific region with its varied opportunities and issues,” said Best. “Regulation, competitive insurance markets and potential for growth are among the major checklists for evaluating M&A activity.”