More ‘wow’ moments predicted for global insurance M&A

By Erin Ayers on March 23, 2018

2017 brought the first “uncertainty” to global insurance mergers and acquisitions and very little activity – but also offered evidence that things might change in 2018, according to a new report from Ernst & Young.

“2017 was not a stellar year for insurance M&A in terms of the overall number or value of deals — with both being broadly comparable to 2016,” E&Y said in its report, adding that 2017 included the fewest deals since 2010. “However, deal activity in 2017 contained signs of the M&A trends that we expect to see accelerate as more insurers seek to transform, using business acquisitions or disposals as elements of that transformation.”

E&Y reported that those signs include firms engaging in “portfolio optimization” or taking care of legacy systems as insurers try to streamline and simplify their businesses, either priming for a sale or looking to expand through acquisition. With most companies looking to evolve their operations to compete in the digital ecosystem more effectively, E&Y predicted headline-making deals in the future.

“We expect to see a number of ‘Wow, that changes everything’ moments in 2018, as participants or new entrants announce innovative business initiatives that fundamentally alter the role and economics of significant elements of the insurance sector,” the consulting firm said in its report.

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eayers@advisen.com'

Erin is an editor at Advisen. She has 15 years of journalism experience. Prior to Advisen, Erin covered property-casualty insurance for 13 years as editor-in-chief of The Standard, New England’s Insurance Weekly. Erin is based in Boston, Mass. Contact Erin at eayers@advisen.com.