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Insurance sector deal values decline in 2019 first quarter: PwC

Posted On: Apr. 25, 2019 8:27 AM CST

Mixed results

Disclosed deal value for the insurance sector fell during the first quarter of 2019 to $53.5 million from $29.5 billion during the same period in 2018, according to a report released Thursday by PwC.

Deal volume, however, jumped 35% during the first quarter compared to last year, to 165 announced deals across the sector, with PwC, also known as PricewaterhouseCoopers, saying the relatively low dollar amount “understates the vibrancy of the market” and that the deal volume is a forward indicator.

“The surge affirms our expectation that the insurance deals market will probably strengthen in the second quarter,” the report said.

PwC also noted that the year-ago period “saw a surge in the number of transformative transactions among property and casualty firms.”

The largest deal during the first quarter was FedNat Holding Co.’s announced acquisition of the homeowners insurance operations from 1347 Property Insurance Holdings Inc. for $51 million in both cash and stock. The homeowners insurance operations include Maison Insurance Co., Maison Managers Inc. and ClaimCor LLC, according to PwC.

Insurance companies did not announce any megadeals, defined by PwC as being valued at $1 billion and over, during the first quarter of 2019. In contrast, six megadeals exceeding $1 billion each were recorded during the first quarter of 2018, with disclosed deal value totaling $27.9 billion, PwC said.

Looking forward, PwC expects deals to continue as property/casualty insurers focus on scale and insurance brokers consolidate, the report said.

“The decline in deal value veils an intense interest in the sector among both private equity firms and publicly traded companies,” the report said.