Deloitte Releases Insurance M&A Outlook
Deloitte has released its annual outlook for the insurance M&A market, which “examines trends over the past several years and identifies key expectations and challenges for 2021 that may help insurance executives pinpoint M&A drivers and plan their strategy accordingly.”
The company said, “The COVID-19 pandemic and resulting economic fallout generated substantial headwinds for insurance industry mergers and acquisitions [M&A] in 2020, although the disruptive impacts have been much less significant for insurance than other financial services sectors.
“COVID-19’s reach is expected to extend well into 2021; however, unprecedented times create opportunities, and M&A could play a critical role as insurance companies figure out how to move on from recovery mode to thrive in the next normal.
2021 Insurance M&A Outlook: “Powering through disruption”
“This report reviews 2020 insurance industry M&A activity and explores some trends and drivers for 2021 that may shape M&A strategy as organizations power through disruption to take advantage of growth opportunities in the coming year. Our primary focus continues to be on conditions and activity in the United States and Bermuda; however, included within the appendix of the report are snapshots of insurance M&A developments in other global markets.”
John Johnston, CEO of Deloitte Caribbean and Bermuda stated “Soft markets and overcapacity have been cited as two of the key drivers of much of the insurance industry consolidation of the past several years. Now, with the worst of the pandemic hopefully behind us, insurers and reinsurers are enjoying a surge in demaid and better underwriting conditions.
“However, cost pressures and low investment returns persist, and opinions are mixed as to the likely duration of the hard market. The general pause in M&A caused by the pandemic hasn’t lessened the strategic rationale or available capital for deals; accordingly, we expect to see a rebound in activity over this and next year”.
“For access to the full report, please click here.”
