Mergers and Acquisitions Trends in the Global Property and Casualty Insurance Industry
February 03, 2014 --
NEW YORK, Feb. 3, 2014 /PRNewswire/ -- Reportlinker.com announces that a new market research report is available in its catalogue:
Improving Industry Health to Bolster Global Merger Activity in 2014
The study analyses merger and acquisition transactions in the global property and casualty insurance industry. The general state of the industry along with factors affecting merger transactions has been described in the study. The study covers five regionsNorth America, Europe, Asia-Pacific, Latin America and the Caribbean, Africa, and the Middle East. Further, drivers and restraints affecting mergers in each region have been brought out in the study. The analysis also highlights buyer profile, seller profile, target profile, time period, and deal rationale by region. Deal parameters include percentage sought, valuations, transaction range, revenue range of buyers and targets across the globe.
Mergers and acquisitions (M&A) in the property and casualty (P&C) insurance industry define and shape the future structure of the industry. Merger activity drives revenue growth and industry consolidation and is affected by a variety of factors, including:Profitability trendsImproved underwriting performance by P&C companies in 2013;Valuation trendsNarrowing the valuation gap;Market cycleHard market cycle;Reserves and capital adequacyIncreased reserves recorded in 2013 compared to the previous year; andRegulatory and governance issuesRestructuring of business units by several companies for regulatory compliance.
M&A activity in the P&C insurance industry is declining in deal volume but witnessing an increase in average deal value in 2013. Improved performance in the industry, renewed investor confidence, improved reserves, and the beginning of the hard market cycle (increase in premiums) complemented by a year (2013) with fewer catastrophic losses than the previous Xyears have improved the prospects of merger activity in this space globally. P&C companies are focusing on greater capital efficiency and cash flow generation by seeking mergers in developing countries with low penetration but high growth potential to strengthen their distribution network.
North America continues to be the hub of merger activity in 2013, with a large proportion of domestic mergers and few outbound transactions in Latin America, the Caribbean, and Europe. European P&C companies, on the other hand, are actively restructuring their business units across the globe and have been active in many outbound transactions, especially in the Middle East region. While Africa and the Middle East have huge growth potential in the P&C space, a lack of transparency is hampering M&A activity. Asia-Pacific, Latin America, and the Caribbean feature domestic merger activity where P&C insurers from developed countries seek to strengthen their distribution network in low-penetration countries within the region.
Property and Casualty Insurance Industry: M&A Scorecard, Global, January 2007September 2013
Top Deals in 2013
Jabez partners acquired Green non-life insurance co. ltd for $Xmillion.The Travelers Companies announced the purchase of The Dominion of Canada General Insurance company for $X million.
Active Buyer Country
The United States, the United Kingdom, Bermuda, Canada, Germany, France, Russia, Australia, Japan, Spain
Active Buyers Industry
Property and casualty insurance, insurance brokers, multiline insurance, asset management, life and health insurance, reinsurance and diversified banks
Most Active Companies
QBE Insurance Group Ltd., Brown & Brown Inc., China Taiping Insurance Holdings Company Limited, Arthur J Gallagher & Co., AmTrust Financial Services, Inc.
Upcoming Target Country
Indonesia, South Korea, Pakistan, Vietnam, Israel, Nigeria, Turkey, Singapore
Most Active Seller Industry
Property and casualty insurance, asset management, multiline insurance, insurance brokers and diversified banks
Active Target Country
The United States, United Kingdom, Russia, Ukraine, Canada, China, Germany, Netherlands, France, Australia
Scope of the Study
January 1, 2007 to September 30, 2013
There were 1,078 transactions, with property and casualty insurance companies as targets.
This includes all property and casualty insurance providers and does not include units of multiline insurance companies providing property or casualty insurance.
Frost & Sullivan in-house research expertise.Established business and financial databases (e.g., Capital IQ)Company annual reportsReports of associationsPublished news and press releases
Who Will Benefit?
Companies operating in the global property and casualty insurance industry
Private equity and venture capital investors
Sovereign wealth funds
Other members in the investing community
Note: All analysis is based on disclosed deals only. Analysis of financial data is also based on availability of information.
SWOT AnalysisProperty and Casualty Insurance
Drive M&A activity in regions that suffered high catastrophic losses such as North America and Asia-Pacific. =>Strengths
Hard market cycles lead to increasing premium growth.Improved underwriting performance translates to better margins.Increasing demand for insurance is likely to drive industry growth.
Cross sell opportunities are barely being tapped.New product offerings/insured risks might help revenue growth.Technology provides improved ways to reach the consumer.
<= Increased competition for targets, such as specialty insurance and niche customer segments, might drive valuation of such insurance companies upwards.Drive M&A activity in regions with high growth potential such as Eastern Europe and countries that provide synergies of distribution. => Weaknesses Financial weakness means low returns for investors.
There is a slow response to technology by insurance companies.
There is a high cost of distribution.
There is an uncertainty about the impact of changing regulations.
Increasing competition from Internet participants.
Small companies may run out of business, due to increasing pressure on margins and regulatory changes.
Government regulations have a huge impact on insurance companies.
<= Driving consolidation of small companies for survival may result in mergers with data processing companies and other Internet participants.
Table of Contents
1. Executive Summary2. Scope of the Study3. Introduction to the Global Property and Casualty Insurance Industry4. Global M&A Trend Analysis in the Property and Casualty Insurance Industry (January 2007September 2013)5. Geographic Analysis of M&A Transactions in the Property and Casualty Insurance Industry6. M&A Outlook for the Global Property and Casualty Insurance Industry7. Conclusion8. The Frost & Sullivan Story
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