A.M. Best Special Report: M&A Activity for P/C & Reinsurance Focuses on Global Diversification

OLDWICK, N.J.--()--Global merger and acquisition (M&A) activity in the property/casualty (P/C) and reinsurance industries continued at a steady pace in the first half of 2014. Based on A.M. Best research, 35 P/C and reinsurance deals were announced globally during the first six months of 2014. The available disclosed amount for all deals was approximately USD 5.6 billion, compared to slightly half of about USD 10 billion announced for all of 2013.

Similar to that of the past few years, much of the M&A activity in the P/C industry during the first half of 2014 was driven by consolidation or companies attempting to enter new markets such as Asia and Latin America. Although not included in the six-month 2014 deal count, one example of this trend was Ace’s July 4th announcement that it will be acquiring the commercial business of Itaú Seguros in Brazil, for nearly USD 700 million, to become the largest commercial insurer in Brazil. In 2013, Itaú Seguros’ commercial business generated approximately USD 1 billion in premiums. ACE’s announcement implied that, once the deal is completed, Latin America will represent approximately 14% of total premiums to ACE compared with about 8% of total premium in 2013 – making ACE one of the major players in the region.

From the sell side, increased competition, low interest rates and lower insurance rates have prompted many companies to downsize through the divestiture of underperforming or non-core business lines. A.M. Best has noticed that some insurers now understand that organic growth remains challenging at this stage of the cycle, making acquisitions an attractive alternative to growing the business internally.

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Copyright © 2014 by A.M. Best Company, Inc. ALL RIGHTS RESERVED.

Contacts

A.M. Best Company, Inc.
Mariza Costa, 908-439-2200, ext. 5308
Financial Analyst
mariza.costa@ambest.com
or
Ken Johnson, 908-439-2200, ext. 5056
Assistant Vice President, Industry Research
ken.johnson@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com

Contacts

A.M. Best Company, Inc.
Mariza Costa, 908-439-2200, ext. 5308
Financial Analyst
mariza.costa@ambest.com
or
Ken Johnson, 908-439-2200, ext. 5056
Assistant Vice President, Industry Research
ken.johnson@ambest.com
or
Christopher Sharkey, 908-439-2200, ext. 5159
Manager, Public Relations
christopher.sharkey@ambest.com
or
Jim Peavy, 908-439-2200, ext. 5644
Assistant Vice President, Public Relations
james.peavy@ambest.com