Global Insurance M&A News: Americas update, October 2015

Insurance M&A News: Americas update Q4 2015

The Americas continues to be the most active region in terms of both size and number of insurance M&A with two big deals in Bermuda.

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Deal activity across the Americas

The trend of consolidation among reinsurers and also in the US health insurance market continues. As a result we have seen a number of large deals, outlined below.
  • Italy’s Exor SpA has won the battle to acquire reinsurance group PartnerRe Ltd for US$6.9 billion. In April it made its first offer, seeking to break PartnerRe’s agreement with Axis. This deal demonstrates the commitment of alternative capital providers to enter the insurance or reinsurance market directly.
  • China Minsheng Investment Corp has signed an agreement to acquire Sirius International Insurance Group Ltd. from White Mountains Insurance Group, Ltd for US$2.2 billion. With this, Sirius can also continue its Asian growth strategy.
  • The implementation of the Affordable Care Act and pressure on insurers to keep healthcare spending down, for employers and the US government, has resulted in various deals, for example between Aetna-Humana and Cigna-Anthem.

Japanese Insurers Focus on the US

The ongoing trend from Japanese insurers acquiring in the US continued with the following large deals:

  • In order to pursue an international growth strategy, Japan’s Meiji Yasuda Life Insurance Company has entered into an agreement with StanCorp Financial Group, Inc. to acquire it for around US$5 billion.
  • Japan’s Sumitomo Life Insurance Company has agreed to acquire Symetra Financial Corporation for approximately US$3.8 billion. With this acquisition, Sumitomo is expected to increase its earnings and improve policyholders’ returns.

Latin America sees an Uptick

In addition, ASSA Compañía Tenedora, S.A. and ASSA Compañía de Seguros (ASSA) have announced to acquire 100 percent of AIG’s operations in El Salvador, Guatemala, Honduras and Panama in a share purchase agreement. This will allow ASSA to expand its regional footprint in Central America.

Latin America, having been relatively quiet earlier in the year, has seen an uptick in activity with a number of recent deals, including Suramericana S.A., the Colombia-based insurance company, acquisition of the Latin America operations of RSA Insurance Group plc for a cash consideration of GBP 403 million (US$614 million). This will allow RSA to focus on its core markets and allow Sunamericana to consolidate its position in the Latin American market.

Similar to Europe, there has also been high levels of activity across the broking sector, as the larger players look to build specialist capability in certain product lines or geographies. Recent deals include:

  • A leading global insurance brokerage firm Hub International Ltd. has acquired the assets of Brown Agency Inc. in Alaska for an undisclosed consideration.
  • The UK-based private equity firm, Apax Partners LLPhas agreed to acquire AssuredPartners, Inc. from GTCR, LLC, the US-based private equity firm for an undisclosed consideration.
  • Marsh & McLennan Agency LLC has acquired Cline Wood Agency, Inc., the US-based property and casualty insurance brokerage company, for an undisclosed consideration. This will help Cline Wood to offer new lines of product and broaden its geographical footprint.

For more information on how KPMG’s global network of member firms can help you with your M&A activities, please contact insurance@kpmg.com.

Note: Content for this newsletter has been compiled from a variety of publicly available sources. 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. 

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