Thursday 01 August 2019 2:32 pm

Insurance M&A jumps to highest level in four years in first half of 2019

Insurance M&A rose to its highest level in four years in the first half of 2019 with 222 deals completed worldwide.

This marked the biggest increase in the volume of transactions since the first half of 2015 and the fourth consecutive six-month period of growth.

In the second half of 2018 there were 196 completed deals globally, the report from insurance-focused law firm Clyde & Co said.

In Europe deals were up 40 per cent with 88 completed deals compared to 64 in the previous six months.

France was the leading European country for deals – and second globally behind the US – followed by the UK and Spain.

The Americas continued to be the most active region for deals with 93 transactions in the period.

Ivor Edwards, partner and European head of corporate insurance at Clyde & Co, said: “Despite recent signs of market hardening, delivering a positive result for shareholders remains challenging and M&A is an attractive strategy to deliver growth for re/insurance businesses around the world.

“In Europe, now that the majority of re/insurers are Brexit-ready, they have been able to divert management attention back towards their growth ambitions. As a result, we have seen a surge in completed deals in 2019 that had been put on hold.”

There were 11 transactions valued in excess of $1bn (£830m) in the first half of 2019, compared to 18 in the whole of 2018.

Edwards said there was a doubt whether this trend would continue.

“The search for scale is still a key factor as leading players seek to deliver cost synergies in addition to new distribution channels and customers. However, there is a limited pool of targets at the top end of the market and it may become increasingly difficult for buyers and sellers to come to an agreement on valuation. We have seen a dip in large deal announcements and this will likely translate into fewer big-ticket transactions completing in the second half of the year,” he said.