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Re/insurance M&A could slow on Trump uncertainty

20th December 2016 - Author: Steve Evans

Uncertainty about the incoming Presidential administration of Donald Trump could slow down U.S. insurance and reinsurance merger & acquisition activity in the first-half of 2017, according to Vikram Sidhu, of Clyde & Co. in New York.

Given the expectation that Trump’s administration will result in some dramatic swings in policy direction, M&A may be off the table for many re/insurance companies in the U.S. who may prefer to wait things out until they have a better view of the future landscape under Trump.

Sidhu explained, “During the first half of 2017, there will remain considerable uncertainty for insurance dealmakers, but deal activity should return to high levels during the second half of the year.

“The key factor leading to decreased deal activity during the first part of the year will be uncertainty about the Trump administration’s policy plans, particularly on economic and trade matters.”

However, Trump may reduce financial regulation in the long-run, reduce taxes and implement policies which are deemed pro-business, which could drive stock markets higher.

“Those factors should lead to an increase in insurance M&A deal activity during the second half of 2017,” Sidhu forecasts.

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