December saw the total value of insurance industry M&A deals reach $12.92 billion globally, according to GlobalData’s deals database. That value was an increase of 470.5% over the previous month and an increase of 336.3% when compared with the last 12-month average, which was $2.96 billion.
Which Countries Had the Most Deals?
The figures also showed that when examining the value in different parts of the world, North America was first with total announced deals worth $8.27 billion in December 2019. And as far as the top country for M&A deals, the United States was number one in terms of deal value at $8.27 billion.
In volume, North America was as the top region for insurance industry M&A deals globally. Next was Europe and then Asia-Pacific. The leading countries as far as M&A deals activity in December was the U.S. with 31 deals, followed by the United Kingdom (8) and France (4).
When looking at all of 2019, the United States saw 93 M&A transactions. And a report by Clyde & Co. found that Europe enjoyed the greatest increase in M&A activity—40% in M&A deals with 88 completed deals in the first half of 2019, compared to 64 in he second half of 2018. Among the European countries, France led in terms of insurance M&A activity and was second most active worldwide behind the United States. France was followed by the UK and Spain.
The Asia Pacific region also experienced respectable growth in insurance industry deals. That region totaled 38 recorded insurance M&A deals for the first half of 2019. That tally was the fourth straight period of rising deal volume to the highest level since 2015, according to the figures from Clyde & Co. Japan was the leader in the region for deals made, then came Australia and India.
However, for all of last year, insurance M&A deals worth $43.63 billion were announced globally, which represented a decrease of 50.1% year over year.
December’s Top Insurance Industry Deals
The top five insurance industry M&A deals made up 99.6% of the overall value during December 2019. The combined value of the largest five insurance M&A deals stood was $12.87 billion, against the overall value of $12.92 billion recorded for the month. The top five insurance industry deals of December 2019 according to GlobalData were as follows:
New York Life Insurance Company’s announcement of the largest acquisition during the fourth quarter with a transaction to purchase Cigna Corp.’s group life and disability insurance business for roughly $6.3 billion. This will allow New York Life to grow its employee benefits insurance operations while Cigna jettisons one of its non-core businesses.
Resolution Life Group Holdings Ltd. announced its plans to acquire the life insurance industry business and other closed life and annuity blocks from Voya Financial, Inc. for $1.25 billion. This deal lets Voya divest capital-intensive legacy blocks to concentrate on high-growth, capital-light core businesses.
Swiss Re announced an agreement to sell its U.K. life subsidiary ReAssure Group plc to Phoenix Group Holdings plc. The transaction values ReAssure at $4.3 billion. Swiss Re received a cash payment of $1.6 billion, shares in Phoenix representing a 13-17% stake, as well as a seat on its board of directors. ReAssure is a life and pensions company that buys and administers closed books of business from other companies.
iA Financial Corp. Inc., the holding company of Quebec City-based iA Financial Group, announced a deal to acquire IAS Parent Holdings Inc. and its subsidiaries for $720 million.
Intesa Sanpaolo and Intesa Sanpaolo Vita approved the acquisition of a controlling stake in the share capital of RBM Assicurazione Salute, wholly owned by the Favaretto family’s RBH Group. The price tag on aht insurance industry deal was $333.73 million.
Research shows that during the year, industry deal volume fell continuously, and the fourth quarter of 2019 continued the downward trend.
In the brokerage subsector, high valuation multiples and intense competition for attractive assets held deal volume down at levels last reported in 1Q 2018, but the overall impact of the decline was buoyed by renewed interest in P&C and life deals. That sector has been on the upswing since the spring of last year.
Projections for 2020
Again, even with the increase in disclosed deal value during the last quarter of the year, the 2019 annual total of $19.9 billion is just half (51%) of the record set in 2018. Two large M&A transactions in 2018, including France’s AXA move to buy Bermuda-based XL Group for $15.3 billion, skewed the year-over-year comparison, researchers say.
Analysts anticipate that the deal activity will be prosperous in 2020, driven by high levels of deployable capital from private equity and corporate buyers. This capital will help foster deals as insurers continue to streamline operations by divesting capital-intensive business such as legacy blocks, according to PwC.
Read about Carpenter Wellington's mergers and acquisitions practice.