The increasing activity in the M&A market during 2015 looks set to continue for the near term at least, with the vast majority of North American insurance companies looking at acquisitions over the next three years.
Interviews with 750 senior-level executives within the insurance industry were carried out by Mergermarket on behalf of Willis Towers Watson for the latter’s annual M&A report. The findings revealed that 73% of companies in the insurance sector in Canada and the US were looking at acquisitions.
Interestingly, 55% of those surveyed are also looking at divestment of operations, with 24% considering a joint venture and 3% a merger.
The research found that almost all companies want to undertake said action in their home market (91%), but some of the executive interviews revealed appetites for actions further afield.
“In North America, firms across the US and Canada are considering inter-regional deals to diversify their product offerings and to underwrite risks in the pipeline,” said the director of underwriting at a North American P&C insurer.
In many cases, hungry insurers are planning not just one transaction, but anticipating entering into a number of transactions in the years ahead. At least 29% are considering one acquisition, while 40% are looking at two or three.
For those not considering expansion, economic volatility and macro was, perhaps unsurprisingly, listed as the driving factor.
