In the third quarter, Europe, Middle East and Africa (EMEA) continues to be the second most active region, with insurance brokerage the most active segment (measured by number of deals), particularly in the London Market.
The UK continued to be the most active market in Europe with some large deals, underpinned by some interesting broader trends, including expansion of Japanese insurers into Europe (similar to recent activity in the US, with potential for significant future activity), consolidation driven by the changing regulatory environment and the continued development of the closed life market (and possible expansion out of the UK and into continental Europe).
On the flip side, Zurich Insurance Group terminated its takeover talks with British insurer RSA following poor performance in its general insurance business.
US companies have also shown interest in expanding their business in Europe, including:
In addition The Carlyle Group, the US-based private equity firm has agreed to acquire Innovation Group, which is a leading British insurance claim technology company for around GBP 500 million. Again, an interesting transaction and one that signals an increasing trend of PE acquiring innovative service companies supporting the insurance industry.
The ongoing trend of exiting non-core operations also continues, illustrated by AXA's announcement that it is in talks with Ageas to sell its Portuguese operations in a deal worth EUR 197.5 million (US$214.9 million).
The life run-off market in Germany has also shown further movement. The latest transaction involved Baloise selling a life insurance portfolio of CHF 1.9 billion from its German subsidiary to Frankfurter Leben, a newly established run-off platform. This deal follows the closing of the acquisition by Athene Holdings of Delta Lloyd's German subsidiaries, with a €4.9 billion portfolio, earlier in October. In the last 18 months this part of the market has really developed with a number of closed book consolidation platforms created, backed by Cinven, Apollo and Fosun. We expect this trend to continue and expand into other continental European markets as the focus on proactive in-force management continues.
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Note: Content for this newsletter has been compiled from a variety of publicly available sources.
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