Insurance M&A market ‘ripe’ for larger deals in second half of 2026: EY leader

The insurance market remains “ripe for M&A activity,” with competitive pressure and the time required to assemble larger combinations likely to push major announcements into the latter part of the year, according to Jeremy Spier (pictured), EY-Parthenon Americas Insurance Sector Leader.

Spier expects more megadeals to emerge during the second half of 2026 following a relatively quiet opening six months for transactions valued above $1 billion. “We obviously saw a bit of a slowdown in those during the first half of 2026, but I think we’ll see a couple of them happen in the second half of the year,” he told Insurance Business.

Some of the delay reflects the complexity of completing major combinations, as well as the need for companies to absorb and respond to large transactions announced during 2025.

“There is a bit of a buildup as people continue looking at valuations and at some of the megadeals and think, ‘What do I have to do to keep up? What sort of megadeal do I need to do to keep up with my competitors?’” Spier said.

Megadeals slow, but US transaction activity remains healthy

Global financial services M&A volume rose 3% year on year to 1,137 publicly disclosed transactions in the first half of 2026, according to EY. However, total disclosed deal value fell to $134.5 billion from $191.3 billion as fewer megadeals reached the market.

There were 25 transactions valued above $1 billion during the period, compared with 37 in the first half of 2025 and 55 in the second half of last year.

EY's analysis showed North American insurance activity also declined on a year-on-year basis. The number of deals fell from 204 in the first half of 2025 to 187 in the first half of 2026, while disclosed value decreased from $20.9 billion to $12.3 billion.

Spier said the figures did not indicate a material deterioration in the underlying US market. Looking specifically at completed US insurance transactions, he counted 175 deals in the first half of 2026, compared with 187 a year earlier. The latest total also represents a significant increase from the 133 US deals completed in the second half of 2025.

“If you look at it half-year over half-year, we’re actually up compared with the back end of 2025 from a deal-volume perspective,” Spier said. “We’re seeing pretty good health in the US M&A market, and I think that is continuing, based on the activity we have going on at the moment.”

Despite the moderation in volume, the megadeals that did close or get announced represented significant strategic bets.

Major Iinsurance M&A deals, H1 2026 (North America & Cross-Border)

Sources: PwC US Deals 2026 Midyear Outlook; The Insurer; Insurance Journal; Reuters

Buyers’ priorities are increasingly centered on profitable growth as softer conditions in parts of the property and casualty marketplace pressure on organic expansion.

“People are looking for strategic transactions that will provide profitable growth opportunities, whether that means increasing distribution, increasing scale or acquiring a strategic specialty or underwriting capability they don’t already have,” Spier said.

Managing general agents (MGAs) remain among the most sought-after insurance targets because they provide access to specialized underwriting teams and expertise. “They are still at the tip of the spear (for investors),” Spier said. “At the end of the day, underwriting is what drives this business to be profitable, and having the right underwriting talent is incredibly important.”

MGA M&A has increased in recent years, with buyers attracted by the sector's increased market share, capital-light business model, and underwriting specialization. Platforms with proven underwriting profitability, stable capacity relationships, and strong organic growth continue to command mid- to high-teens multiples.

Spier said he expects capital to continue flowing into specialty, program and MGA businesses from both insurance carriers and private equity firms. Distribution businesses are also attracting strong private capital interest, although investors are becoming more disciplined on valuations and the structure of potential exits.

Technology still an M&A driver but there’s ‘no perfect target’

Technology is another important consideration, but Spier cautioned against expecting an acquisition to provide an instant solution to an insurer’s artificial intelligence strategy. Instead, buyers are examining whether a target can accelerate their technology plans without undermining the infrastructure investments they have made over the past decade.

"Both evaluations are important," said Spier. "Can this supercharge me in some way, and will this affect any of the progress I've made over the last decade? There isn’t a perfect insurance target out there that is fully AI-native from end to end and will transform your business overnight.”

With several major carriers now operating at significantly greater scale following 2025 and early 2026 combinations, the pressure on mid-tier players to respond is building.

“If you think about the P&C market, the softer market cycle obviously puts pressure on growth,” Spier said. “People are looking for strategic transactions that will provide profitable growth opportunities, whether that means increasing distribution, increasing scale or acquiring a strategic specialty or underwriting capability they don’t already have.”