Insurance sector mergers and acquisitions will “return to form” in 2018 after a slower 2017, while technology will also be a major growth driver this year, according to a Clyde & Co report issued Friday.

There were 350 completed M&As in the insurance industry in 2017, down from 387 the previous year, said the London-based law firm in its annual Insurance Growth Report.

But while deal volume shrank last year, market pressures to achieve growth were unrelenting, the report said.

“In the seven years that we have been conducting our annual research, (insurers and reinsurers) have rarely experienced tougher market conditions or been under greater pressure to deliver growth,” the Clyde report said.

Despite the challenges and decline in deals, however, the report was bullish on 2018.

“Our M&A team are predicting that 2018 will be the year when M&A returns to form and the way the year has started, with a number of high profile deals announced already, suggests that will be the case.”

In January of this year, American International Group Inc. bought Validus Holdings Ltd. for $5.56 billion in cash, and on Monday France’s Axa S.A. moved to buy Bermuda-based XL Group Ltd. for $15.3 billion.

Asia was identified as a potential source for deals as Japanese buyers continue to pursue overseas targets, while Korea “finally begins to follow suit,” and India may present emerging market opportunities, the report said. Deals in China will be “subdued,” the report said.

U.S. deal-making will also help drive 2018, the report said, as the U.S. “has regained its position as the most active region for transaction activity and will continue to lead the way, with dealmakers displaying greater confidence one year into the Trump administration.”

By the end of 2017, deals in the Americas constituted 50% of the yearly total, followed by Europe at 36%, Asia-Pacific at 11% and the Middle East and Africa at 2%, the report said.

“After a lacklustre couple of years for transactions, this rise in activity indicates a renewed level of confidence in deal-making as a tried-and-tested route to growth,” Andrew Holderness, London-based global head of corporate insurance for Clyde & Co, said in a statement accompanying the report.

Technology will also help insurers grow in 2018, the report said.

“2017 was the year in which insurtech became a mainstream driver for growth in the insurance sector,” said the Clyde report.

Fully eight of 10 insurers planned to invest in technology in 2017, the report said. Companies are looking to deploy technology “to help them boost their top line, develop new products, enhance their distribution strategies, win new customers or build customer loyalty and drive efficiencies,” the report said.

“In a marketplace where price competition is fierce and top-line growth hard to find, (insurers and reinsurers) are focusing on driving efficiencies through better and more intelligent technology,” New York-based Clyde partner Vikram Sidhu said in the statement.

The Clyde & Co Insurance Growth Report is report is based on data by Thomson Reuters and Alacra for completed mergers and acquisitions in the global insurance industry in the period 2009 to 2017. Additional input, analysis and insight was gathered from face-to face and telephone interviews with Clyde & Co partners around the world during December 2017 and January 2018, the report said.