Analysis by FTI Consulting shows that the UK and Ireland region continued to lead the European market for insurance industry mergers and acquisitions (M&A) activity, with 44 announced transactions in Q1 2022.
This represented a decline from 71 signed transactions in Q1 due to the increased saturation of the UK and Irish markets in terms of the availability of distribution targets, FTI Consulting noted.
Overall European M&A deal volumes were down compared to Q1 of 2021, but this was attributed to a backlog of deals completed last year that had been held up following the COVID-19 pandemic, as well as wariness over the ongoing conflict between Russia and Ukraine currently.
In the UK and Ireland, FTI Consulting found that PE-backed acquirers accounted for around half of total transactions announced during Q1, although there has been a rising trend of dealmaking activity driven by strategic buyers.
Motivations include economies of scale, access to Lloyd’s and the ability to boost revenues from hardening premium rates.
Among the major deals undertaken in Q1, AXA UK&I acquired renewal rights to Ageas UK’s commercial business for an initial consideration of £47.5mn, in a move expected to strengthen AXA’s UK growth strategy and commitment to commercial business customers and broker partnerships.
Reports also suggested that Aviva was considering acquisition of Covéa’s UK insurance operation, valued at around £725mn.
Additionally, UK motor insurer First Central Insurance & Technology Group was reported to be considering a sale, with interest expected from both PE firms and strategic buyers.
International PE firm Cinven agreed to acquire International Financial Group, and a proposed merger between UK mutual protection, savings and retirement firm Liverpool Victoria Financial Services (LV=) and Royal London Group was abandoned.