Deal value for global insurance mergers and acquisitions was up $44.4 billion in the first six months of 2018, driven by a slew of megadeals that pushed value to its highest first-half total since the financial crisis, according to a report from Willis Towers Watson and Mergermarket.
The first half of the year saw 14 deals worth over $600 million taking place in this sector, although total deal volume was down to just 84 deals, the lowest number since 2009, according to the report.
The key deal drivers behind this increase are related to the changing nature of business models. In the report, as regulatory pressures become the norm, new models emerge and more businesses are trying to return to their core strategy.
In As processes, reporting and monitoring have become increasingly common, as usual, executives have taken back their own stratejik bandwidth iler and have taken on the task of guiding their companies strategically, gör says the senior director Willis Towers of Watson Solvency II.
For companies wishing to adopt this approach, an increasing tendency is to break away from the undesired parts of their business, indicating that valuable assets are once again in the market. For private equity investors, entry levels in records increased interest in these assets and led to complex acquisitions in 2018.
Since the tax reform in the region has provided a sudden increase in company earnings since the beginning of the year, regulatory changes in the US have played an important role in terms of assets, which means that US insurers are instantly attracted to foreign insurers who see the potential of the insurers. To earn more from the US than before.
While these drivers support a positive outlook for the global insurance M & A in the coming months, the authors claim that the time-to-market could extend the stage to implementation, given the higher prices and potential deal complexity.
Willis Towers Watson’de executive director Jack Gibson, “we’re seeing a much longer period of time from closing the announcement,” he said. Ver However, the debt continues to be cheap and following the latest tax reforms, US companies were given a steroid shot. We will continue to see an active M & A market, which is only to overcome the barriers that will pay the right price and last longer for a longer period of time, and perhaps lead to fewer agreements this year. ”
Other findings in the report include:
The sector sector, which was seen in H1 2018 in recent years, was divided. The P / C led the way with 44 deals, followed by the life sector with 22 deals, 11 composite and seven reinsurance.
The insurance sector has been slower to adapt to new technologies than other technologies. It will be important to invest in insurtech by remaining behind its digital rivals and to engage in this issue in the future.
Foreign investments from Asian companies that want to expand their geographic footprint and gain talents are increasing. In particular, we will see tactical gains in more advanced markets by players in Asia – an increasing trend due to China’s Belt and Road initiative.
Political and economic uncertainty may affect the global agreement with the volatility surrounding Brexit and the tension between the acquisition of potentially threatening agreements between China and the US – although the sector continues to be optimistic that the M & A volume on insurance could protect its focus from cross-border tension.
The report covers the completed M & A agreements from January 1, 2018 to June 30, 2018 with a minimum value of $ 5 million.
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