Global Insurance M&A News: Europe, Middle East, Africa update, October 2015

Insurance M&A News: EMEA update Q4 2015

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.

Global Head of Insurance Deal Advisory

KPMG in the U.S.

Contact

Related content

The dome

Deal activity across EMEA

  • Willis completed its acquisition of PMI Health Group which is a leading independent healthcare adviser and broker in the UK. This transaction will expand the service offering and skills base of Willis.
  • A leading London specialist wholesale insurance broking firm, Miller Insurance Services LLP announced that BB&T IHC International Ltd will acquire 16.9 percent interest in the firm to improve connectivity with Lloyd’s market and strengthen their market position.
  • Global private investment firm Highbridge Principal Strategies (“HPS”) has made a strategic investment in Price Forbes & Partners, which is a leading independent Lloyd’s insurance and reinsurance broker.
  • Marsh & McLennan Companies Inc. has reached an agreement to acquire Jelf Group PLC for approximately GBP 258 million in cash.

The UK Forges Ahead

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).

Examples include:

  • Japan’s MS&AD Insurance Group Holdings, Inc. has announced to acquire Lloyd’s of London insurer Amlin Plc for around US$5.3 billion in order to strengthen its presence and risk management capability in reinsurance.
  • Swiss Re's business unit Admin Re has agreed to acquire Guardian Financial Services for GBP 1.6 billion. With this acquisition, Admin Re can strengthen its position as a leading closed life book consolidator in the UK.
  • Just Retirement Group PLC and Partnership Assurance Group PLC has announced an all-share merger for around US$1 billion.

On the flip side, Zurich Insurance Group terminated its takeover talks with British insurer RSA following poor performance in its general insurance business.

US Shifts Focus to Europe

US companies have also shown interest in expanding their business in Europe, including:

  • The acquisition of Jelf Group PLC by Marsh & McLennan Companies Inc. for GBP 258 million discussed above.
  • In another deal, the US-based specialty P&C Company, Amtrust Financial Services, Inc. acquired Amsterdam based, N.V, Nationale Borg-Maatschappij and its affiliates ("Nationale Borg") for a cash consideration of EUR 154 million.
  • The US-based insurance products and services company, Unum Group has announced the acquisition of National Dental Plan (NDP) from Capita plc for GBP 31.7 million. This acquisition offers Unum the opportunity to broaden its proposition reach.

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.

Across the Continent

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.

African Insurance Market Continues to Evolve

  • African Bank Limited is planning to acquire The Standard General Insurance Company Limited for around US$104 million.
  • South Africa based Mutual & Federal Insurance Company Ltd has agreed to acquire 33.6 percent stake in Credit Guarantee Corporation of South Africa for ZAR 600 million (~US$47 million). With this acquisition, Mutual & Federal can develop in to the rest of the continent.
  • AXA announced that it will acquire 100 percent of Commercial International Life (“CIL”), the Life & Savings joint-venture between CIB and Legal & General in Egypt for around EUR 88 million (US$98 million). The sale is in line with CIB strategy of selling its non-core banking activities. AXA has also entered 10-year Life & Savings exclusive bancassurance agreement with CIB.

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.

Connect with us

 

Request for proposal

 

Submit

KPMG's new digital platform

KPMG's new digital platform