Conning Research: 2011 U.S. Insurance Mergers & Acquisitions Up, With Shift to Strategic Transactions
Transactions increased by 36 Percent; Deal value increased by 18 Percent
(Hartford, CT) March 28, 2012 – Insurance mergers and acquisitions in the U.S. continued to gain momentum in 2011, with a focus on strategic transactions. Transactions increased in every market segment, including property-casualty, life-annuity, health, distribution and service firms, according to a new study by Conning Research & Consulting.
“Mergers and acquisition activity in the U.S. insurance market rose again in 2011, with a 36 percent pickup in transactions and an 18 percent increase in deal values,” said Jerry Theodorou, analyst at Conning Research & Consulting. “In a low interest rate environment, the combination of continuing post-financial crisis economic growth, increased pressure for more regulatory capital, rising company valuations, and soft market conditions all favored increased mergers and acquisitions activity. Many companies actively sought strategic M&A solutions, bolt-on additions, or lines of business that could provide a growth solution. Bolstered by rising company valuations, sellers were also increasingly motivated to sell, as the bid-ask spread narrowed.”
The Conning Research study, “Global Insurance Mergers & Acquisitions in 2011: A Shift to Strategic Transactions” tracks and analyzes both U.S. and non-U.S. insurance industry M&A activity across property-casualty, life-annuity, health insurance and distribution and services sectors.
“Strategic plays dominated the insurance mergers and acquisitions market in 2011,” said Stephan Christiansen, director of research at Conning. “Transactions involving mutual insurers more than doubled in 2011, as they sought merger or affiliation solutions to the damaging impact of heavy natural catastrophe losses and other challenges. We also saw a sharp increase in vertical integration driven transactions, where insurers acquired managing general agents and other distribution solutions to support growing specialty lines of business. At the same time, private equity-backed transactions rose dramatically, with particular focus on distribution and services sectors.”
“Global Insurance Mergers & Acquisitions in 2011: A Shift to Strategic Transactions” is available for purchase from Conning Research & Consulting by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.
About Conning Research & Consulting
Conning Research & Consulting is a division of Conning, a provider of asset management and insurance industry research and consulting services to insurers. Conning Research & Consulting has published independent insurance industry research for 50 years, including market coverage of 30 segments of the industry in addition to industry forecasting and identification and analysis of major strategic issues. As a result of its wealth of experience and intimate knowledge of the insurance industry, Conning understands industry challenges and opportunities and provides in-depth analyses on a wide range of industry products and issues. Conning is headquartered in Hartford, CT.