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Mergers and acquisitions announced in the insurance sector during the fourth quarter 2019 totaled $12.5 billion, the highest total since first quarter 2018, according to a report Thursday from PricewaterhouseCoopers International Ltd.
The 2019 fourth quarter deal total was some five times that of the $2.2 billion reported in fourth quarter 2018, while deal volume, at 108, was 43 lower than in the fourth quarter 2018, the report showed.
Deal volume in the brokerage subsector was limited in the fourth quarter by “high valuation multiples and intense competition for attractive assets,” the report said.
Notable transactions included Aon PLC’s agreement to acquire U.S.-based digital insurance platform CoverWallet Inc. and Tokio Marine Holdings Inc.’s October agreement to buy U.S. high net worth insurer Privilege Underwriters Inc. and its specialty insurance subsidiaries, known as Pure Group, for $3.1 billion, PwC said.
The consultancy expects deal activity in 2020 to be “robust…driven by high levels of deployable capital among private equity and corporate buyers.”
Deployable capital among both corporate buyers and private equity firms will help foster deals as insurers continue to streamline operations by divesting capital-intensive business such as legacy blocks, PwC said.
Merger and acquisition activity in the insurance industry will likely continue apace as capital continues to flow into the sector and inventory remains ample, experts say.