![]() ![]() ![]() Marc Voses, Clyde & Co Partner in New York said: “In the US, reinsurers are exercising heightened caution with respect to what's being written under producer agreements between insurers and MGAs/MGUs. “Private equity funds have largely been absent from the insurance market over the past year but have maintained their focus on larger M&A targets in anticipation of potential opportunities.” MGA experience divided by geographyĪs insurers continue to look beyond M&A for growth opportunities, MGAs remain a viable option for insurers who want to penetrate further into markets where they lack the appropriate depth or breadth of underwriting expertise. With limitations on the amount of organic growth that can be generated through new distribution networks or broader lines of business, those firms that want to leap forward and grow quickly are actively seeking merger and acquisition opportunities. “In contrast, large global insurance businesses seem undeterred by market conditions. Small to medium-sized enterprises will continue to be wary of transactions as they wait for the current market uncertainty to subside. Last year the number of ‘mega-deals’ in the insurance M&A market – those valued in excess of USD 1 billion – dropped to 19 from 25 the previous year, but there is an expectation that 2023 could see the return of big M&A transactions.Įva-Maria Barbosa said: “We are expecting a two-speed 2023. Europe saw the smallest annual increase with 127 transactions in 2022, up from 125 previous year, while H2 2022 marked the second consecutive period of declining activity in the region. Activity in the Middle East and Africa was up 41% year-on-year, propelled by a strong first half (16 deals) followed by just eight in H2 2022. It also saw an 22% increase in the second half of the year, the only region not to experience a dip in that period. Asia-Pacific saw the highest year-on-year increase in percentage terms with 60 transactions in 2022, up from 42 in 2021. Deal volume in H1 2022 reached its highest level since 2011 with 132 deals but dropped 21% in the second half of the year to 104. The Americas remained the most active region for M&A in 2022, with 236 deals, up 5% on 2021. The re-opening of China’s borders following lockdown restrictions will only serve to bolster confidence in the region further.” “In contrast, investors in Asia-Pacific were generally slower to regain confidence post-pandemic, but have put that reticence behind them with a consistent and increasing trend of rising deal numbers. Deal-makers in the Americas and Europe are displaying a heightened sense of caution as they switch to wait-and-see mode in the face of market uncertainty, which will likely result in a lag in overall transaction volume. “However, looking ahead, underlying trends point to mixed investor sentiment. However, there was a marked downturn in the second half of the year with 207 deals completed, compared to 242 in H1, as economic and inflationary pressures began to impact investor sentiment, according to Uncertainty breeds opportunity, the latest edition of global law firm Clyde & Co’s insurance growth report, released today.Įva-Maria Barbosa, Chair of Clyde & Co's Corporate & Advisory Group, said: “Despite the return of inflation, and measures from central banks to restrict liquidity, deals that were put on hold during the pandemic continued to come to market in 2022, maintaining the upswing in deal-making that began the previous year. There were 449 completed mergers and acquisitions (M&A) worldwide in the insurance sector in 2022, up from 418 the previous year, the highest for a decade. Abundant capital and availability of targets points to uptick in M&A in H2’23.Investor sentiment will strengthen as insurers eye range of growth options.Two-speed deal market forecast for 2023. ![]() Asia-Pacific only region to see continued upward trend in deal volume in H2.Bumper year for insurance deals offset by significant slowdown in H2’22.The latest edition of global law firm Clyde & Co’s insurance growth report has been released today, which looks back at what drove insurers’ growth activity last year and pulls out key trends likely to impact them in 2023 as they seek to grow in this most complex of environments. ![]()
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