Monte Carlo 2022 - M&A Roundtable
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Monte Carlo 2022 - M&A Roundtable

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The debate over where the best home is for a reinsurance business is an age-old one, and in an environment where investors are less than keen on reinsurance as an opportunity, it has become even more critical.

Some believe reinsurance businesses ought to stand alone, given that they are specialist and prone to volatility. Others believe a pairing of a reinsurance business with a primary business, or even within a consumer lines or composite financial services group is a better play, with the other elements of such an entity working to diversify away cat risk.

At our roundtable at the Monte Carlo Rendezvous, sponsored by Lloyd’s Banking Group, we assembled a panel of experts from the reinsurance broking and underwriting arena to tackle the thorny questions around reinsurance M&A.

Our experts discussed the reasons why investors are presently less than enthusiastic about reinsurance, with a five-year run of outsized cat losses featuring principally among them.

We also looked at the recent spate of sales of reinsurance businesses (or attempts thereof) and whether or not there is the opportunity for a new investor to enter the scene, buy up unwanted reinsurance businesses and make a consolidation play.

In the broking world we looked at the unprecedented levels of consolidation, driven by private equity and institutional investor hunger for a cash-generative investment in a fragmented marketplace. We asked how much further the broker consolidation road has to run, and where the next hotspot might be for such an opportunity now that the UK and US markets are fairly mature in that respect.

Lastly, we looked at whether investors might turn to the legacy market as that too heats up – and whether or not this corner of the market could experience its own phase of consolidation.

We explore these themes and many more with our panel of experts over the next few pages. We hope this summary helps to further understanding of a uniquely complex and dynamic topic.

Rachel Dalton,

Lead reporter, Insurance Insider

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