Global insurance mergers and acquisitions (M&A) fell to a 16-year low in 2024 as insurers reduced dealmaking activity amid economic uncertainty, geopolitical instability, and increasing regulatory scrutiny, according to Clyde & Co’s annual report.
The report recorded 202 completed transactions in 2024, a decline from 346 in the previous year. This marked the lowest level since Clyde & Co began publishing its growth report in 2009. Persistent high interest rates and regulatory concerns contributed to the slowdown in insurer appetite for acquisitions.
While traditional M&A activity declined, investment in managing general agents (MGAs) increased, with insurers in the US, Europe, and the Middle East allocating capital to this segment.
Clyde & Co’s report counters that of WTW’s, with the brokerage reporting earlier this year that global M&A activity recorded a substantial increase in completed transactions in 2024.
The WTW report indicates that large transactions played a key role in driving this growth, setting the stage for continued activity in 2025. WTW notes that 710 deals valued at over US$100 million were completed globally last year, a 15% jump compared with the 619 deals finalised in 2023.
Despite a weak 2024, Clyde & Co says that M&A activity is expected to rebound in 2025, led by the US, where investor confidence has strengthened.
The report suggests that deregulation and a lower cost of capital could drive acquisitions both domestically and internationally. Foreign interest in the US excess and surplus (E&S) market is predicted to rise, while US insurers may look abroad for underpriced assets, supported by a strong dollar.
Technology is anticipated to be a key driver of deal activity in 2025, particularly in areas such as artificial intelligence and cyber resilience. Regulatory changes across different markets are expected to influence transactions, both as a catalyst and a constraint.
The expansion of MGAs is forecast to continue, while regional consolidation in markets such as the Middle East is likely to persist.
That said, Clyde & Co partner Eva-Maria Barbosa (pictured above) noted that many of the challenges that shaped the M&A landscape in 2024 will continue into 2025.
She said that the growth of MGAs is providing an alternative expansion route for insurers, but traditional M&A could also regain momentum, particularly in the US.
Barbosa said that the volume of deals already proposed in early 2025 suggests a strong pipeline. This forecast, however, is not without its share of scepticism; a MarshBerry report notes that two months into the year, activity within the UK insurance distribution sector continues at a slow pace, following a similarly subdued start in January.
In 2024, the Americas recorded 72 transactions, down from 162 in 2023. The UK and Europe saw 56 deals, a decline from 107 the previous year. The Asia-Pacific region completed 39 transactions, compared to 52 in 2023. The Middle East and Africa saw a slight increase in activity, with 17 deals completed in 2024, up from 15 the year before.
In Europe, M&A activity was primarily driven by regional consolidation, with notable cross-border deals such as Sampo’s acquisition of TopDanmark. In Germany, consolidation among mutual insurers continued, while major carriers increased investments in MGAs.
In the UK, Aviva’s acquisition of Probitas marked its return to the Lloyd’s market, though broader M&A activity in London remained subdued due to ongoing uncertainty.
