P&C and life insurance M&A deal value is expected to increase by 150 percent year on year to more than $44bn in 2018, according to new analysis from S&P Global.
It is the second-busiest year in terms of unadjusted aggregate deal value since 1998, with more than $39.1bn in aggregate transaction value having occurred since the start of the year, according to the firm.
The busiest 12 month period of the last 20 years was 2015 when major P&C M&A deals such as Ace’s takeover of Chubb and Willis’ merger with Towers Watson took place.
This year’s M&A appetite has been driven by US tax reform and “continued inbound interest from international acquirers” in the face of factors like protectionist political rhetoric, excess capitalisation and PE-backed interest, S&P said.
AIG’s “re-emergence” as a conslidator and investment in InsurTech startups also fueled M&A growth were also cited by S&P.
According to S&P, carriers have been using M&A to broaden the scope of products they offer and enhance their specialisations to combat some of the longer-term factors disrupting the industry, such as the rise of the sharing economy and autonomous vehicle usage.