In contrast to the broader deals slowdown in other sectors, there were 194 announced insurance M&A transactions representing over $7 billion in value for the six months from mid-November 2022 to mid-May 2023, suggests a new report from PwC.
This total compared to 263 announced transactions and $2 billion in deal value in the previous six-month period from mid-May 2022 to mid-November 2022.
PwC states that the lower-value insurance brokerage transactions drove much of the decline in transaction volumes.
According to the firm, three mega deals have been announced so far in 2023.
In February, Stone Point Capital LLC announced its 20% acquisition of Truist Insurance Holdings Inc. for $1.95 billion.
PwC notes that this deal demonstrates a continued demand from private equity buyers for insurance distribution assets given their “steady stream of cash flows.”
Brookfield Reinsurance Ltd. also announced a deal in February to acquire Argo Group International Holdings, Ltd. for $1.1 billion, which PwC says will add scale to Brookfield’s existing P&C platform after its acquisition of American National Group Inc. acquisition last year.
Meanwhile, in May, RenaissanceRe Holdings, Ltd. announced a $3 billion deal to acquire American International Group, Inc.’s treaty reinsurance business, including Validus Reinsurance Ltd.
PwC suggests that this acquisition will enable RenaissanceRe to scale its P&C reinsurance business and focus on underwriting, fee and investment income to drive profitability.
“Deal activity in the life and annuity sector remained especially strong in 2023, driven by large reinsurance transactions, which are excluded from the above metrics,” explains the firm.
PwC continues, “There were several notable reinsurance transactions announced in May 2023, including the Fortitude Reinsurance Company Ltd. / Lincoln National Life Insurance Company, Resolution Life US Holdings Inc. / Farmers New World Life Insurance Company, and MetLife Inc. / Global Atlantic Financial Group reinsurance agreements (reinsurer / reinsured, respectively).”
