After a strong start to the year, insurance merger and acquisition (M&A) activity in first-quarter 2020 quickly cooled with the onset of the coronavirus pandemic, says a new report from MarshBerry.
At the start of the year, buyers were well-capitalized and eager for deals. However, many transactions that were planned to close in early April or May have now been pushed back 30-90 days, mostly due to logistics of confirmatory financial and legal due diligence, MarshBerry explains.
Nonetheless, a total of 134 insurance deals were announced in Q1, with 19 buyers completing two or more transactions, accounting for 72.4% of all deals.
While it's too early to gauge the impact COVID-19 will have on upcoming M&A transactions, MarshBerry asserts that "the insurance distribution industry has strong fundamentals that make it an attractive investment with a relatively low-risk profile. As a result, we expect continued interest from private equity groups, public brokers, as well as privately held national and regional brokers."
Take a look at the infographic below for more information on insurance M&A activity from Q1 2020.
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