8 April 2014
Despite the tepid M&A volume in the insurance sector since the financial crisis, dealmakers are optimistic that there will be an uptick in activity over the next 12 months, according to a report released today by Mayer Brown, a leading global law firm, and published in association with Mergermarket.
The report, Global Insurance M&A Outlook
, is based on survey responses from insurers and reinsurers in the life and/or P&C subsectors, as well as bankers who have worked on insurance M&A transactions. Read the full report
Key findings from the report include:
• Respondents anticipate M&A activity will rise in both the property and casualty (P&C) (88%) and life subsectors (87%). The positive outlook is supported by the improving economy, which 68% of respondents cite as the main factor spurring the increase.
• Respondents believe alternative asset managers and/or private equity firms will be among the most active buyers driving M&A in the life (68%) and P&C (71%) subsectors over the next 12 months.
• The majority of respondents (85%) say they will finance their acquisitions using their balance sheets, reflecting the strong capital position of many insurers.
• For half of respondents, one of the most important alternative growth strategies will involve the development of new distribution channels.
“As business is conducted on a more global scale, insurance companies are increasingly looking for opportunities to expand their product offerings and distribution capabilities through acquisitions,” said Edward Best, Mayer Brown Corporate & Securities partner and co-leader of the firm’s Capital Markets and Financial Institutions groups. “Therefore, it is more important than ever for such companies to have access to global legal counsel that can help them navigate complex issues across various disciplines in multiple jurisdictions.”
Mayer Brown has one of the leading global insurance industry practices, representing nearly 400 insurers and insurance-related entities in transactional, regulatory and dispute resolution matters across the Americas, Asia and Europe. Its Insurance Industry Group regularly advises acquirers, target companies and sellers in connection with domestic and cross-border acquisitions and dispositions of insurance companies, divisions and lines of business. Mayer Brown also represents financial advisors in structuring M&A and demutualization transactions and providing fairness opinions. The firm’s substantial M&A experience is combined with its more focused understanding of insurance transactions to provide clients with the highest level of representation.
Mergermarket is the leading provider of forward-looking M&A news and intelligence for M&A professionals and corporates. With more than 300 journalists based in 65 locations worldwide, Mergermarket is the only specialized media service that offers active analysis of corporate strategy before it becomes public knowledge, and a historical deals database to analyze past deals. Mergermarket is part of The Mergermarket Group, a Financial Times Group company.