ACORD, the standards-setting organisation serving the insurance sector, has released an updated version of its report Carrier Mergers & Acquisitions: Drivers, Implications & Outcomes, providing a detailed examination of consolidation trends across the industry.
The publication assesses what is driving insurer acquisitions today and considers the consequences for business models, technology alignment and investor returns.
Drawing on its research, ACORD reviewed close to 500 completed carrier transactions spanning 84 countries between July 2023 and December 2025.
The findings indicate that just over two-thirds of these deals delivered positive value, while nearly one-third had a negative impact. ACORD measured performance through total shareholder return achieved by acquiring companies, compared against the MSCI World Index.
The report identifies a clear evolution in both the popularity and effectiveness of different acquisition strategies when set against patterns seen over the previous decade.
ACORD observes that deals aimed at increasing scale or broadening operational scope have lost prominence, dropping to the third most common motivation. This approach, centred on cost efficiencies and expanded reach, continues to struggle in terms of outcomes and is the only category to record negative returns overall, with an average decline of 13.6%.
By contrast, ACORD notes a marked rise in diversification-led transactions. Once relatively uncommon and associated with weaker performance, this strategy has become the leading driver of deal activity, accounting for 41% of acquisitions. At the same time, its results have improved considerably, with average returns of 13.7%, signalling a significant turnaround in both usage and effectiveness.
ACORD further reports that transactions focused on acquiring specific capabilities, although limited in number, are delivering the strongest performance. Making up just 6 per cent of deals analysed, these acquisitions are designed to enhance expertise or accelerate capability development, and they achieved the highest average returns at 27.7%.
ACORD reports that insurance carrier deal activity has declined significantly from its high point of 321 transactions in 2016 to around 163 in 2025. The organisation attributes this slowdown to a more difficult transaction environment, shaped by elevated capital costs linked to higher interest rates, ongoing inflationary pressures, geopolitical instability and a more demanding regulatory landscape.
At the same time, ACORD observes a clear shift in the nature of transactions being completed. While overall volumes have fallen, deal sizes have grown substantially. Between 2015 and 2024, the average disclosed value of carrier transactions stood at roughly $455 million, but by 2025 this figure had risen sharply to approximately $1.1 billion, indicating a move towards fewer but significantly larger deals.
“The underperformance of Scale & Scope as a buyer motivation highlights the difficulties of achieving scale-related benefits through M&A. Increasing scale only amplifies what already exists, including inherent limitations and challenges; it rarely transforms,” commented Dave Sterner, Senior Vice President of Research & Development at ACORD. “Scale benefits are often overestimated, while cost synergies are smaller than projected. Integration risks are also systemically underpriced, and diseconomies of scale are overlooked.”
“For transactions that fell short, value destruction was driven primarily by execution, not deal logic,” Sterner added. “Without disciplined value-capture management, synergies identified in diligence often dissipate during integration.”
“As insurance M&A continues to evolve toward fewer, larger, and more complex deals, disciplined execution will remain the defining differentiator between transactions that close and those that deliver lasting results,” Sterner continued.
“Organisations that protect core operations, translate deal intent into focused value initiatives, establish clear decision rights, and sequence integration deliberately are far better positioned to sustain value creation.”
