Insurance Mergers Dropped in 2009, Reports Conning

The U.S. saw a significant decline in the reported value of insurance industry mergers and acquisitions (M&A) transactions in 2009, and overall global transaction values also declined further from very low 2008 levels, 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 & Consulting. “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 Research study, “Global Insurance Mergers & Acquisitions in 2009,” analyzes both U.S. and non-U.S. insurance industry M&A activity across property/casualty, life, health and distribution and services sectors.

“Non-U.S. M&A transaction values actually increased 58 percent, due to significantly larger transactions in the life-annuity and health sectors, while non-U.S. property-casualty 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.”

Source: Conning Research & Consulting