Will the property-casualty insurance industry's impressive financial results for 2006 spur a boom in insurer mergers and acquisitions this year? The smart money is betting on the affirmative, with three-quarters of industry leaders predicting greater consolidation, and experts citing huge profits combined with a softening market as M&A catalysts. "Cash, confidence, competition and cross-border deals drove M&A activity in 2006, and none of these are in short supply as we enter the new year," according to Daniel Varroney, chief executive officer of the Association for Corporate Growth.

Across the economy, a survey of M&A professionals by the association indicates that 90 percent expect the record $3.8 trillion of global deals in 2006 to be followed by an equal or even better figure in the first half of this year.

When looking specifically at the property-casualty sector, 77 percent of executives surveyed at the recent Joint P-C Insurance Industry Forum in New York said they expect consolidation among insurers/reinsurers to increase this year.