Merger and acquisition (M&A) activity in the insuranceindustry is increasing, although the number of deals still remainswell below levels seen before the financial crisis, according toSwiss Re's latest sigmastudy, “M&A inInsurance: Start of a New Wave?

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The recent M&A upswing is largely concentrated in certainsectors such as specialty reinsurers and insurance intermediaries,says Swiss Re.

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Survey results indicate that sentiment toward M&A is turningas confidence about the economy gradually improves and marketparticipants look for deals to boost profitability as well asbolster their balance sheets. Of late, there also has been apick-up in M&A deals in the property & casualty reinsurancesector.

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According to Swiss Re, key M&A trends in insuranceinclude:

  • Defensive divestments and strategic sales of closed blocks andrun-off operations

  • Increased involvement of alternative investors, and strategic(regular and forced) deals focused on expanding expertise

  • Distribution capabilities and geographical reach.

Globalization is also driving M&A activity. Insurers fromadvanced countries continue to focus on overseas expansion in highgrowth markets, the report adds.

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