Last year, Tony Ursano, chief executive officer, Willis Capital Markets and Advisory, gave a presentation at the Monte Carlo Rendez-Vous de Septembre conference in which he stated that 2010 would be a good year for M&A, but, asks II, was he right?
The Bermudian insurance industry in 2010 is, by all accounts, in rude financial health. It has accumulated deep reserves of capital following a year of few catastrophes, and a year in which solid underwriting performance delivered further upward margins and the global markets returned to liquidity.
This has got analysts, brokers and chief executive officers abuzz with thoughts of consolidation, particularly as the levels of capital floating around currently have not been seen since the heady days of 2007, a vintage year in which M&A activity was part of the insurance landscape.
However, almost uniquely to the industry, such a propitious situation has a downside. The resultant ‘soft market’ is squeezing avenues for further organic growth as lines of writing business dry up. In particular, companies across the board have felt the pressure on premium rates, which took a hit in the recent January renewals. CEOs and chief investment officers are now having to think about ways to achieve growth, aware that their success and survival are dependent on having ample financial capital.
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Willis, Bermuda, M&A, PartnerRe