Insurance M&A Newsletter, July 2015 | KPMG | QA
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Global M&A Insurance News, July 2015

Insurance M&A Newsletter, July 2015

In this issue of our Insurance M&A newsletter we continue to explore the key themes and trends impacting the global insurance markets and the implications for M&A.



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Bridge on the road

Throughout the Spring and early summer of 2015, we have seen a number of large-scale deals, including ACE acquisition of Chubb, Willis merger with Towers Watson and Aetna’s merger with Humana. We expect further activity through the balance of the year and into 2016, as the pricing and yield pressure continues to drive the need for scale in the P&C market, particularly when combined with complementary underwriting capability or distribution reach. 

There is also a strong expectation of further consolidation in the US health insurance market as insurers respond to the new environment created by Obamacare.

We expect to continuing involvement from alternative capital, which new investors entering the market. This trend will be complemented by increasing activity from pension funds and private equity investors.

In Europe, the lack of certainty around Solvency II continues to create a difficult environment for acquirers. A number of business models will be stressed under SII and accordingly we expect to see an increase in deal activity in the second half of the year. Interestingly, Mexico which has adopted its own version of Solvency II is expecting a wave of consolidation driven by increasing capital requirements.

Finally, we have undertaken a recent study on the opportunities created through alliances and partnerships. We expect this type of transaction or tie up will be an increasingly important mechanism for insurers to secure distribution, innovation, capability and customer reach. Our report covering bancassurance and the link between FinTech and insurance and innovative distribution will be released later this year.


In Asia Pacific, IAG and Berkshire Hathaway formed a strategic relationship, helping the insurer to reduce its capital requirements. Under the deal Berkshire will take 3.7 percent stake in IAG for A$ 500 million.

Additionally a number of Taiwanese financial services companies have announced regional/domestic expansion plans. While the Chinese market saw an increase in domestic activity. Read more:

  • CTBC Financial Holding Co Ltd, the Taiwan listed financial services group has announced to merge with Taiwan Life Insurance Co. Ltd through a stock swap valued at US$1 billion to continue its pattern of organic growth through large deals.
  • In another deal, Fubon Financial Holding of Taiwan has agreed to acquire a 48 percent stake in Hyundai Life Insurance Co., Ltd., the South Korea-based insurance company for US$ 200 million.
  • Nan Shan Life Insurance Company Ltd has agreed to acquire AIG Taiwan Insurance Co., Ltd for US$158 million. This will help AIG to concentrate on its commercial business in Taiwan.

China witnessed a number of domestic deals such as:

  • HNA Investment Group Co., Ltd has agreed to acquire 19.6 percent stake in Sinosafe General Insurance Co. for CNY 2.3 billion (approximately US$ 371 million). 
  • Sanxia Life Insurance Co Ltd has agreed to sell a 20 percent stake to Chongqing DIMA Industry Co Ltd for a consideration of CNY 200 million (approximately US$ 33 million).
  • Zhong An Online Property Insurance Co. has raised CNY 6 billion (approximately US$ 944 million) from a group of investors in order to improve its capital strength and also to become a comprehensive insurance provider.

Europe, Middle East, Africa

In the second quarter of 2015, a number of private equity deals were witnessed across the region mostly in the insurance brokerage segment. Additionally, many European companies continue to use M&A to build scale, acquire complementary underwriting capability, enter new markets and strengthen positioning in existing markets. In Africa, we continue to see the insurance market evolve. Read more.

  • In France, Ardian has become the majority shareholder of SIACI SAINT HONORE, a leading provider of insurance broking and employee benefits services in France. Now Ardian holds 57 percent of the capital of the company.. Cobalt Capital has become the majority shareholder of Eurodommages S.A, a France based vehicles insurance broker to help them in its development strategy. BlackFin Financial Services Fund I acquired Lucheux SAS which provides auto insurance brokerage services.
  • In UK, RFIB Holdings Limited, the international Lloyd’s insurance and reinsurance broker has agreed for the sale of its majority share to Calera Capital. Bowmark Capital has agreed to acquire Aston Scott Group (ASG), one of the UK’s largest independent Risk Management and Insurance broking groups, for an undisclosed consideration.
  • In a private equity deal, Penta Investments Limited has acquired 50 percent stake in DOVERA zdravotna poistovna, a.s., the Slovakia based health insurance company from trust company Prefto Holding Limited, for an undisclosed consideration.

Many European companies continue to use M&A to build scale, acquire complementary underwriting capability, enter new markets and strengthen positioning in existing markets, such as:

  • Global reinsurance and insurance broker Willis Group Holdings has agreed to merge with Tower Watson in a deal valued at US$18 billion. With this merger Willis can increase its penetration in US property and casualty insurance corporate market and in turn can help Tower Watson expand its business internationally. The merger will generate cost savings of US$100-125 million within three years of closing. Willis Group has also made an offer to acquire the remaining 70 percent stake in Gras Savoye, the leading French insurance broker for EUR 550 million to extend its presence in France and also to strengthen its position in mid-market sector.
  • Global specialist insurer Hiscox has reached an agreement to acquire RH Specialist Insurance, a UK classic car business of Willis.
  • Germany based financial services company, MLP AG has agreed to acquire DOMCURA AG, a Germany-based company which offers insurance brokerage, risk management, underwriting services for EUR 18 million. This will help MLP to enter the non-life insurance segment.
  • ASR Nederland N.V., the Netherlands-based provider of life, property, casualty, and health insurance products and services has announced an acquisition of AXENT, a Dutch insurance company, and also De Eendragt, a Netherlands-based pension insurer. These acquisitions will help strengthen their position in the Dutch insurance market.
  • The UK-based health and dental insurance provider, Simplyhealth Group Limited has agreed to sell its private medical insurance (PMI) business and Simplyhealth Administration Services Limited (SASL) to AXA PPP healthcare. This acquisition will enhance AXA’s presence in the UK healthcare market and is in line with Simplyhealth’s strategy of investing in everyday healthcare.
  • Royal London 360 Insurance Company Limited has entered into an agreement with Lloyds Banking Group plc (“Lloyds”) to acquire its international life business Clerical Medical International Insurance Company Limited (“CMI”) in order to build scale and to support its growth plans.
  • Howden Broking Group of UK has acquired PrimeCare Insurance Services Limited and Care Home Insurance Services with the aim to grow in the care sector, for an undisclosed consideration.
  • Chase Templeton Limited has acquired Get Private Limited, the UK-based insurance intermediary which will add annual premiums of around GBP 6.3 million. This acquisition is in line with its intention to target SME space.
  • Credit Mutuel has agreed to acquire the Spain-based Atlantis Seguros, for an undisclosed consideration. Credit Mutuel will benefit through Atlantis’ existing distribution channels and insurance services.
  • As a part of ongoing strategy of Skandia to sell non-core assets, it is in agreement with Nordic Insurance Consolidation Group (NICG) to sell the life insurance company, Skandia Livsforsikring AA / S. This transaction will enable NICG to provide targeted services to clients with guaranteed pensions.
  • Spain-based Catalunya Banc, S.A. has agreed to acquire 50 percent of Mapfre Vida CatalunyaCaixa and the same percentage of CatalunyaCaixa Assegurances Generals for EUR 606.8 million.
  • Markerstudy Group has reached an agreement to buy the UK motor business of Chaucer Insurance Group Plc for total consideration of approximately US$60 million. This will provide Markerstudy with an additional gross written premium of over GBP 900 million.
  • Dutch Central Bank has approved the sale of Dutch insurer Vivat to Chinese insurance group Anbang. The Dutch government has agreed to sell the group for EUR 1 billion. In addition to this, Anbang will pay a tax claim of EUR 85 million and will also repay an internal loan of EUR 552 million.

In Europe, companies are also looking to dispose of their legacy business. Examples include:

  • Corporate parent AstraZeneca UK is looking to dispose IC Insurance, the UK registered captive insurer for Imperial Chemical Industries ahead of implementation of Solvency II. Randall & Quilter Investment Holdings Ltd has announced to acquire it for a cash consideration of GBP 17 million.
  • UK based, Zurich Assurance Ltd has decided to transfer GBP 1.2 billion of individual annuities to Rothesay Life as it seeks to offload its non-core legacy assets.

In Africa, continued evolution in the insurance market was observed.

  • Barclays Africa is planning to acquire 63.3 percent stake in Kenya’s First Assurance for KES 2.9 billion. With this acquisition, Barclays Africa can tap the growth opportunity in its Wealth, Investment Management and Insurance business in East Africa.
  • Old Mutual has acquired 13.6 percent stake in a pan African insurance holding company, UAP Holdings Limited from The Abraaj Group. 
  • An international private equity firm ECP announced its sale of equity stake in NSIA Participations SA to National Bank of Canada (with 20.9 percent interest) and Amethis Africa Finance (with 5.4 percent interest).
  • AXA accelerates its expansion in Egypt with the acquisition of Commercial International Life Insurance (CIL) for approximately GBP 88 million. CIL is jointly owned by Legal & General with 55 percent stake and CIB with 45 percent stake. This deal will also allow it to enter into a life & savings bancassurance agreement with Commercial International Bank ("CIB") for a span of ten years.


The Americas have been the most active region in terms of both size and number of transactions, with strong interest from the large global players. As a result we have seen a number of large deals. Read more.

  • The US insurance industry witnessed its biggest ever deal with the announcement of ACE to acquire Chubb for US$ 28.3 billion in cash and stock. In terms of market capitalization, this acquisition will create the second-largest listed property and casualty insurer in the US.
  • Tokio Marine Holdings, Inc., has signed a definitive agreement to acquire HCC Insurance Holdings, Inc. for a total consideration of approximately US$ 7.5 billion. This acquisition will enhance its operations in the US and will also help them to diversify. 
  • In another deal, Chinese conglomerate Fosun International Ltd has agreed to acquire around 80 percent stake in Ironshore Inc. for around US$ 1.84 billion. 

The US Supreme Court rejected a case which would have obstructed the implementation of the Affordable Care Act (ACA) of 2010. It has allowed nationwide tax subsidies in Obamacare law. With this, the anticipated consolidation in the US health insurance market fueled further. Few examples of consolidation include:

  • One of the largest US health insurer Aetna Inc. announced to buy Humana Inc. for about US$ 37 billion in cash and stock. It is also expected that UnitedHealth Group Inc. in turn could also make a bid for Aetna Inc.
  • In another deal, Centene Corporation has agreed to acquire Health Net, Inc. for US$ 6.8 billion. The deal will help Centene to increase its scale and will also help them with product diversification.
  • The two rivals Cigna Corp and Anthem Inc. are in discussion talks again after Cigna returned the US$ 47 billion proposed merger by Anthem.
  • Molina Healthcare of Florida, Inc., a wholly owned subsidiary of Molina Healthcare, Inc. has announced to acquire certain assets of Preferred’s Medicaid business in Florida. With this acquisition, Molina will gain its presence in the region.

Insurance brokerage has been the most active segment with a large number of domestic deals:

  • Marsh & McLennan Agency LLC (MMC) has acquired McQueary Henry Bowles Troy, L.L.P. (MHBT) one of the largest insurance broker of the region for an undisclosed consideration. This will help MMA to expand in southwestern region.
  • Orchid Underwriters Agency, LLC has acquired Coastal Agents Alliance for an undisclosed consideration. This will help Orchid to enhance its position in the US.
  • Patriot National, Inc. has acquired TriGen Insurance Solutions, Inc. for a cash consideration of US$ 9.74 million. The transaction is in line with Patriot’s growth strategy to extend its service offerings.

A number of private equity deals were also witnessed in the segment such as, ABRY Partners, LLC has acquired a controlling stake in The Hilb Group, LLC. With this, the group can expand beyond the east coast. Alliant Insurance Services also announced a significant equity investment from Stone Point Capital LLC.

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Global M&A Insurance News

Global M&A Insurance News – insights, updates and developments

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