Insurer Merger Activity To Rise: Tillinghast

By Gary Mogel

NU Online News Service, Dec. 10, 12:36 p.m.EDT?Property-casualty insurance industry consolidationswill see an uptick in the coming year, the Tillinghast-TowersPerrin consulting firm in New York predicted.[@@]

"A tier of stronger players have emerged that are now ready tofocus on growth strategies," noted Patricia Guinn, a Tillinghastexecutive council member.

Given operating and financial pressures, insurers are trying togain market share through acquisition and expanded distribution,according to Tillinghast.

"On average, we expect to see one significant insurancetransaction per month over the next 24 months. Future deals will beabout scale, distribution and restructuring," said John Nigh,mergers and acquisitions practice leader for Tillinghast.

"Sizable deals like St. Paul/Travelers and Manulife/Hancock aregoing to force consolidation among other players," Mr. Nigh added."Companies that previously considered themselves big will now bemid-sized."

Steve Lowe, Tillinghast's global property-casualty insurancepractice leader, predicted that the market will soon be dominatedby a handful of major players, complemented by specialist firmsoperating in market niches.

"In both personal and commercial lines, a strong brand willbecome more critical to success," Mr. Lowe pointed out. "Greaterscale will be required to support the distribution of mass-marketproducts. Size will be defined by companies like AIG and the newSt. Paul/Travelers combination."