The ingredients are in place for stronger U.S. mergers and acquisitions activity in 2013, and the potential for deals among Bermuda reinsurers may finally be realized as competitive pressures increase momentum for consolidation, a new report says.
In Conning’s latest industry report, “U.S. and Global Insurance Industry Outlook 2013, Economic, Capital Markets, and Regulatory Challenges Continue: Nothing to Be Gained by Waiting for Things to Get Better,” the firm says U.S. M&A activity in the P&C sector could increase due to limited organic-growth opportunities, low interest rates and financing terms that are attractive to potential buyers, and an increased focus within the sector on reducing expense ratios.
Conning also says improved equity valuations “provide currency for stock buyers, potentially providing a more-attractive sale environment.”
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