The drought in U.S. insurance mergers and acquisitions continued in 2009, falling to the lowest in eight years, a Windsor consulting firm says.
U.S. insurers also posted a sharp decline in the value of mergers and acquisitions transactions last year, according to a new study by Conning Research & Consulting.
“In the U.S., the value of insurance industry transactions was the lowest we have reported since 2002,” said Jerry Theodorou, analyst at Conning Research. “The property-casualty sector dropped 78 percent last year, while U.S. life-annuity marked its second year below $1 billion in M&A values, and health insurance also dipped below $1 billion. Insurance services posted the only increase in values year over year, and represented more than half of the total transaction value for the industry.”
The Conning study tracks and analyzes both U.S. and non-U.S. insurance industry M&A activity across property-casualty, life, health and distribution and services sectors.
Outside the U.S., M&A transaction values grew 58 percent in 2009, fueled mostly by larger transactions in the life-annuity and health sectors. However, property-casualty merger activity outside America declined for the second year, said Stephan Christiansen, director of research at Conning.
“Looking forward, we are already seeing that pent-up demand is driving increased M&A activity in most sectors of the insurance market, as economic and credit conditions improve and valuations rise again to more normal levels,” Christiansen said.
