M&A: Search for scale to drive activity

Deal volumes in mergers and acquisitions (M&A) are likely to be lower this year as merger activity takes a break because the industry is focusing on developing strategies and rebalancing portfolios in line with Solvency II rules. But there are many reasons to believe that activity is going to pick up again soon.

Aggregate deal values of M&A activity jumped 238 percent year over year in 2015 to $67.6 billion, driven by property/casualty, according to Deloitte’s 2016 Insurance M&A Outlook, making it the most active year ever for M&A across all insurance industry sectors. In life & health the number of deals and aggregate deal value picked up, but far from past heights, according to the report. Property/casualty registered record price/book value multiples in 2015 while the number of deals fell.