Insurer Merger Activity To Rise: Tillinghast

Insurer Merger Activity To Rise: Tillinghast

By Gary Mogel

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

"A tier of stronger players have emerged that are now ready to focus on growth strategies," noted Patricia Guinn, a Tillinghast executive council member.

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

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

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

Steve Lowe, Tillinghast's global property-casualty insurance practice leader, predicted that the market will soon be dominated by a handful of major players, complemented by specialist firms operating in market niches.

"In both personal and commercial lines, a strong brand will become more critical to success," Mr. Lowe pointed out. "Greater scale will be required to support the distribution of mass-market products. Size will be defined by companies like AIG and the new St. Paul/Travelers combination."