The global numbers
Clyde & Co’s Insurance Growth Report mid-year update was released today with some interesting news for the insurance world. Mergers and acquisitions reached their highest point in 10 years in H1 of 2022. Globally there were 242 completed deals, up from 221 in the second half of 2021 and 197 in the same period last year.
The regional numbers
The US was a hotbed of action, having had its most prolific period in 10 years with 132 deals – jumping from 108 in H2 last year. Europe, meanwhile, had a bit of a lull. Overall, M&A dropped from 74 in H2 2021 to 67. The most active countries were France, the Netherlands and Spain who were all behind the UK at the forefront.
The MENA region saw a rise in deals from 12 to 16 with Africa playing host to the majority – four in the Ivory Coast, three in South Africa and two in Kenya.
Clyde & Co comments
“In the face of stark economic pressures – inflation, rising energy costs, and looming recession – insurers remain focused on growth opportunities. Several factors are driving deals. Rising interest rates promise better investment returns for long duration businesses, while helping insurers to rebalance portfolios. Private equity firms and asset managers are still keen to explore either entry into the insurance market or expansion of existing footprints. And flagging insurtech valuations mean acquisitions are increasingly attractive to both PE investors and traditional carriers seeking to increase technological capabilities.” Says Eva-Maria Barbosa, Partner at Clyde & Co’s Munich branch.
Divestment of non-core assets
An area which saw a considerable boost – due to ongoing economic uncertainty – in H1 of 2022 was the divestment of assets that carriers don’t consider fundamental to their business. However, deal over $1 billion have plateaued. Those deals dropped to thirteen from 14 in H2 of 2021.
Clyde & Co comments
“Europe has seen a large number of run-off deals which are used to make sure there isn’t any unwanted old business sitting on the balance sheet that might hinder a possible M&A transaction.” Said Ivor Edwards, Clyde & Co Partner at their London office.