The re/insurance industry has been hit by a storm of mergers and acquisitions (M&A) activity in recent years, and our panel looked into the raison d’etre, to try to figure out if it was really delivering the benefits its proponents claimed.
The ongoing soft market, as well as pressure on terms and conditions, has been a key factor in driving M&A activity. 2015 saw $89 billion of volume in 770 deals according to Capital IQ – a dramatic 187% increase on the $31 billion of transactions in 701 deals in 2014.
Aon Benfield noted that acquirers’ desire to expand geographically and into new products and distribution channels, was one of the main drivers of increasing M&A activity. So, too, was the need to achieve scale and stronger client relationships, as well utilising existing capital more effectively through diversification.
The wave of M&A activity has affected Bermuda – and there is an expectation that there is more to come. From an employment point of view, there is a general sense of relief that M&A activity has not resulted in the island losing as many jobs as had first been feared.
Xuber gathered a group of executives on the island to talk about market conditions, innovation, technological change and analytics.
