Perspective: Trends driving the Insurance | KPMG | CA

Perspective: Trends driving the Insurance M&A landscape in 2015

Perspective: Trends driving the Insurance

Global insurance M&A is off to a fast start in 2015. A strategic focus for many insurers and reinsurers as they look to enter new markets, secure partnerships or rationalize non-core operations, mergers and acquisitions can offer competitive advantage and profitable growth when done well.

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In our new report, Perspective: Trends driving the insurance M&A landscape in 2015, we share insights on four broad trends we predict will have the biggest influence on deal activity over the coming months.

Trends to watch

  • High growth markets swing to India and Africa as the rising stars. While the pace of change in developing countries brings diverse challenges, many opportunities abound.
  • Regulation, likely the most important driver, has a unique ability to quickly and fundamentally change the market landscape. Changes in foreign ownership restrictions, capital reform and conduct will play a critical role for organizations and the decisions they make around M&A, joint ventures and partnerships throughout 2015.
  • Efficiency and focus through increased rationalization of non-core operations; driving improved cost and capital efficiency through the effective management of back books; and an amplified emphasis on enhancing the customer experience and distribution. See page 8 of the report for a 4spotlight on Joint Ventures.
  • Consolidation heats up as reinsurance markets react to continuing rate pressure, and increasing competition from alternative capital providers. One of the key tends in 2015 will be successfully linking alternative capital with underwriting capability.

In conclusion, we expect deal activity in 2015 to develop in a similar way to last year, with high growth markets at the forefront given the continued demand to secure access to underlying growth opportunity together with regulatory change driving interest. Potential buyers could come from many different sources with the traditional global players facing increasing competition private equity and alternative capital providers.

If you would like to discuss these issues further please contact us at insurance@kpmg.com.

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