Insurance sector mergers and acquisitions decline

Mergers and acquisitions in the insurance sector declined sharply in the first half of this year to 171 completed deals worldwide, down from 207 in the second half of 2022 and 242 in the first half of last year, according to a report Thursday from law firm Clyde & Co.

The U.S. saw the most first-half deals of any country with 60, down from 83 in the previous six months. The Americas, however, saw the greatest decline, to 79 deals, down from 104 in last year’s first half and the fewest first-half deals in the region since 2014.

Europe saw its fewest deals in more than a decade with 47, as the U.K registered the most deals with 11.

The Asia Pacific region had 29 completed deals – 14 in Japan and three each in Australia, China, Hong Kong and South Korea, according to the report.

The Middle East and Africa was the only region to see an increase in mergers and acquisitions in the first half,  with nine completed deals, compared with eight in the previous six months.

Diminishing appetite in some regions for insurtech businesses has been one factor in the overall drop in deal activity, the report said.

Eva-Maria Barbosa, a partner at Clyde & Co in Munich, said in a statement with the report that “the lull in insurer M&A will be short-lived.”

M&A activity is expected to rebound in the second half of the year, although deal volume is not expected to return to the highs of 2022 in the immediate future, the report said.

“We anticipate that the volume of transactions will start to rise again towards the end of 2023 as insurance businesses acclimatize to the new operating environment, with the broker segment leading the way,” Ms. Barbosa said in the statement.