Favourable environment for insurance M&A including ongoing consolidation in the life insurance sector
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Current market
- Upward
We are seeing
- Strategic M&A deals
- Significant consolidation as soft market and higher capital requirements are driving potential for consolidation in general/ reinsurance sectors
- Intra-group reorganisations
Key drivers
- Appetite to replicate UK back- book consolidation around Europe
- Asset availability as EU banks offload non-core assets
- Market participants searching for growth outside primary markets
- Financial sponsor interest in insurance assets
- Heightened US/China inbound interest in insurance assets
- Global Systemically Important Insurers reducing Solvency II/ regulatory capital requirements by shedding capital-intensive business lines
Trends to watch
- Solvency II and Senior Insurance Managers Regime require a full list of those in key functions to be set out in a governance map showing clear lines of reporting and organisational responsibility. This is driving intra-group reogranisations aimed at optimising regulatory capital efficiencies, in lieu of the new risk-based Solvency II requirements, and improving corporate governance structures
- Searching for growth and higher profit margins outside primary markets
- Ongoing consolidation in the life sector
- Investment in fintech
Our M&A forecast
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Sustained levels of M&A across Europe driven by continued pressure on the Global Systemically Important Insurers to exit legacy and non-core portfolios and focus on capital redeployment to escape additional operational and regulatory burden of the 'SIFI' designation.
Publicly reported examples
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Financial institutions M&A: Sector trends
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