M&A activity hit record in 2015

The value of global insurance merger and acquisition activity hit a record high last year, with about $143.5 billion worth of transactions, according to a survey released Wednesday by Willis Towers Watson.

That was about three times the value of deals in 2014, according to “Defying Gravity: Insurance M&A on the Rise”. The survey noted that the number of deals in 2015 — 230 — was actually five fewer than in 2014, but activity was “buoyed” by the increase in the number of large-value transactions, defined as those worth more than €500 million ($540 million). There were 33 such deals last year, up from 18 the previous year.

The survey found that the most significant motivation for deals was the attractiveness of the targets' “existing market position and customer base,” which was cited by 48% of both the property/casualty and life insurance respondents. The second most frequently cited driver for property/casualty insurers was diversification in terms of product lines, cited by 34%, while the target's distribution ranked third for property/casualty insurers at 28%.

The survey also found that 92% of the deals took place in regions where insurers already had existing operations.

The survey was based on the responses of 750 senior executives split evenly between the property/casualty and life insurance sectors. The companies surveyed last year for the study were split evenly among the America, Asia and Europe Middle East Africa regions.