Insurance mergers & acquisitions (M&A) activity grew during the first half of 2020, according to Clyde and Co’s Insurance Growth Report mid-year update.
In the first half of the year, completed M&A in the global insurance industry held steady with 201 completed deals worldwide, up from 197 in the second half of 2019.
Clyde and Co said while the outlook for the second half of the year anticipates a drop off in M&A activity, as the effect of the pandemic is seen in the level of completed deals, “the stage is set” for re/insurance transactions to make a comeback in 2021.
Clyde & Co said the deals completed in the first half of 2020 would have been negotiated and agreed back in 2019, pre-pandemic. It added that the impact of Covid-19 on insurance M&A will “only become clear in the coming months”.
Clyde & Co said: “Meanwhile, uncertainty – the enemy of deal-making – has rarely been as prevalent in the market. What might targets look like in the next six months, one year or five years?
“How will Covid-19 impact the availability of financing? And how confident can buyers be in their own businesses before they turn their sights to M&A? The market is not at a standstill, but strategic and financial buyers are putting heightened focus on deals that make sense to them.”