M&A Activity Showed Healthy Increase in 2011

NU Online News Service, March 28, 3:04 p.m. EDT

Property and casualty insurance company mergers and acquisitions activity increased in 2011 by 28 percent over the previous year, according to a report released by Conning Research & Consulting.

The report, “Global Mergers & Acquisitions in 2011: A Shift to Strategic Transactions,” reviews the M&A environment for last year saying that overall U.S. M&A activity increased by 36 percent, while outside the United States, activity remained unchanged from the prior year.

Focusing on U.S. P&C insurance M&A activity, the primary interest was in niche companies and specialty lines. In general, acquisitions were apparently done for strategic reasons.

With investment sources producing low results, more attention was paid to underwriting results, making companies with low combined ratios attractive candidates.

The focus was on the middle- and low-middle-market segments, where deals ranged from $100 million to $1 billion, Conning says.

The number of P&C transactions rose from 60 in 2010 to 77 in 2011, the report says.

For all of 2011 there were 592 U.S. insurance transactions announced, covering both P&C and life and health, the highest ever recorded, says Conning.

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