Mergers and acquisitions in the insurance sector declined sharply to 346 deals globally last year, down from 449 in 2022, but a gradual return to growth is possible this year, according to a report Monday from law firm Clyde & Co. LLP.
Deal activity fell last year in all four regions – Americas, Europe, Asia Pacific, and Middle East and Africa –but there was a slight uptick overall in the second half as global activity increased 2.3%.
The Americas remained the most active region for M&A in 2023, with 162 deals completed, down from 236 in 2022. The number of deals rose slightly in the second half of the year, with 83 deals completed, up from 79 in the first half.
Europe saw 107 deals last year, down from 127 in 2022, but M&A activity climbed 22.9% in the second half.
However, deal activity in the Asia Pacific and Middle East and Africa regions declined by 20.7% and 33.3%, respectively, in the second half.
As the global economy continues to feel the impact of high inflation, funding for transactions for many insurance businesses has been “challenging to find,” said Peter Hodgins, Clyde & Co. partner in Dubai.
“In the face of this market uncertainty, dealmakers have remained in wait-and-see mode, with a negative impact on overall transaction volume in 2023,” Mr. Hodgins said.
Clyde & Co. predicts deal activity has reached the bottom of the current cycle and overall is likely to increase through 2024, with Europe leading the way.
