Insurance M&A activity down in 2013
2013 proved to be a weak year for deal flow in the insurance industry—particularly in risk-bearing sectors, according to a new study by Conning, with transaction numbers down 6.7percent compared with 2012 and the aggregate deal values down 55.3 percent.
“Mergers and acquisitions activity lagged in 2013 in all insurance sectors except distribution,” said Jerry Theodorou, analyst at Conning. “Property-casualty transactions—driven by the mildly improving economy—still declined to the lowest level since the financial crisis.
“The life-annuity industry aggregate deal value was off by almost half, due mainly to the slowdown in financial buyer acquisitions of annuity businesses. Health insurance transactions and deal values took a nosedive in 2013, as carriers turned from preparation for the Affordable Care Act to implementation activities in the year.”
The Conning study, “Global Insurance Mergers & Acquisitions: A Tale of Two Markets” tracks and analyzes both US and non-US insurance industry M&A activity across property-casualty, life-annuity, health insurance and distribution and services sectors.
“Mergers and acquisitions in the US insurance services sector in 2013 continued close to the high level of 2012,” said Steve Webersen, director of research at Conning. “Private equity investors were again attracted to insurance technology and claims services businesses due to the high reported margins. Meanwhile, in the insurance distribution sector, 2013 insurance broker/agent transactions declined slightly from prior year, but aggregate deal value rose, again driven in large part by private equity participation.”
