Insurance industry mergers and acquisitions increased in 2005 to the highest level since 2001 and may foreshadow an acceleration of activity this year and the next, according to a new study by Conning Research and Consulting, Inc.
“There are a number of factors that lead us to expect a continuing increase,” said Stephan Christiansen, director of research at Conning Research & Consulting. “The insurance industry is growing capital faster than revenues, and while revenue growth is anemic, prospective profitability appears relatively solid. Stock performance for the industry has been relatively strong as well, with each of the sectors outperforming the S&P 500 from 2002 through 2005. In addition, we believe advantages of scale are increasing in the industry for a variety of reasons.”
The Conning Research study, “Mergers & Acquisitions and Public Equity Offerings-Fasten Your Seat Belts!” forecasts insurance industry M&A activity and its effects on the industry.
“M&A transactions in 2005 increased to 324, and total values of these transactions grew to $50.8 billion, exceeding 2004 levels,” said Christiansen. “Public offerings, including secondary offerings, were strong in property/casualty but declined in all other sectors.”
“Mergers & Acquisitions and Public Equity Offerings-Fasten Your Seat Belts!” is available for purchase from Conning Research & Consulting Inc., by calling (888) 707-1177 or by visiting the company’s web site at www.conningresearch.com.
Source: Conning Research & Consulting Inc.
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