As the three-way PartnerRe-AXIS-Exor battle proved, the M&A trail can be a challenging and adrenaline-fuelled business. But what is driving such deal frenzy and what is the reality for companies when post-deal reality kicks in and normal business must resume? Intelligent Insurer reports.
The pace of mergers and acquisitions (M&A) on Bermuda’s re/insurance market turned from a steady drip to a frenzy this summer. The proposed AXIS-PartnerRe merger was thwarted by an outsider to the sector in the form of Italian investment fund Exor, which eventually won what became a long and sometimes bitter battle for PartnerRe.
Other deals including XL’s takeover of Catlin slipped through with less fuss. But there is no doubt that the market is being reshaped by this current activity and will continue to adjust to a number of new dynamics increasingly coming to the fore in the market.
John Andre, group vice president at AM Best, says the activity is being driven by a perceived need for companies to diversify into new products or markets and develop scale in order to be perceived as relevant in the market. He argues that cedants increasingly want a smaller number of strong partners to work with that can provide more complex products and strong protection.
PartnerRe-AXIS-Exor, M&A, JLT, Aon-Benfield, re/insurance,