Mergers and acquisitions, USD 3.4 billion in the first six months
 Extremely high volatility of financial markets and an unfavorable
economic climate continue to impede the development of mergers and
acquisitions market in insurance and reinsurance industry, according to a
report presented in Baden-Baden by GUY CARPENTER. Thus, the activity in
this field in the first six months of 2011 stood at a level similar to
the one from the corresponding periods in 2010 and 2009. From January to
June 2011, a total of 22 major transactions were announced and
completed, whose aggregated value amounts to over USD 3.4 billion.
Also, plans for another 15 operations of this type have been presented, the processes being in course of finalization. If they are made at the value initially announced, an amount of USD 1.8 billion will be added to the volume of the M&A market.
Despite the unstable macroeconomic environment, in the opinion of GUY CARPENTER analysts, a number of factors will lead to the development of this market. First of all, it is the implementation of Solvency II, in the context in which the planned regulatory changes will place (re)insurance companies in a position to seek new strategic options. Also, the significant claims paid by profile companies as a result of unprecedented number of natural disasters will force some players to find solutions to restore the capital.
However, recent turmoil on international stock exchanges, translated into a very high volatility and amplified by the perspectives of a new recession, could lead the mergers and acquisitions to a state of stagnation and even reduction.
Author: Mihaela CIRCU
on 26.10.2011
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