Insurance M&A expected to surge in H1 2021

Written by Adam Cadle

19/02/2021

Insurance M&A is expected to surge in H1 2021, according to Clyde & Co's latest sector report, with the number of completed deals worldwide likely to surpass 220 in a six-month period for the first time since 2019.

“Deal-makers’ appetites have returned, buoyed by growing confidence in the economic outlook and the sense that there are opportunities to be had. Despite market hardening, many of the fundamentals driving M&A will persist,” Clyde & Co’s European corporate insurance group head Ivor Edwards stated.

“These include competition for assets, the need to diversify portfolios, add digital capabilities, and increase scale and market share. The availability of plentiful capital, combined with a deeper pool of targets, will give buyers plenty of choice although we expect them to select acquisitions carefully to ensure the best fit with their strategic objectives.”

There were 407 completed M&A worldwide in the insurance sector in 2020, down from 419 the previous year. A total of 206 deals were completed in H2 2020, which was slightly up from 201 in the first six months of the year.

The Americas remained the most active region for M&A, with 192 deals in 2020, a rise of 6% on 2019. It saw a spike in the second half of the year with 102 transactions – the highest number for five years – up from 90 in the first six months. Asia Pacific witnessed 75 deals, a 9% rise from 69 in 2019, with M&A accelerating through the year, while the Middle East and Africa saw the biggest gains in percentage terms, albeit from a low base, with 32 completed deals in 2020, up from 12 the previous year, a 167% rise.

In contrast, activity in Europe was down by almost a third (34%), year-on-year, to 103 from 155 in 2019.

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