It seems the insurance acquisition market is in swing across all sectors of the insurance industry. And many are predicting that trend will continue, as companies try to grow and solidify their market shares.
Robert Fettman, a counsel in the New York office of Hogan Lovells, has extensive legal experience overseeing a number of large mergers and acquisitions. He spoke with
Insurance Business about what he’s seeing in the mergers and acquisitions (M&A) market from a legal perspective.
“I would say interest remains high from alternate capital sources outside of the strategic insurance sector – private equity firms, pension funds, foreign buyers who may not have much insurance business – with the US being the largest insurance market in the world,” he noted. “It’s a very attractive market, even with the high volumes and the stronger dollar.
“The experts are thinking there will be an uptick in [M&A] activity in 2017, given the relative pause we saw in the market in early 2016.”
Fettman has represented insurers in transactional and regulatory deals, including providing counsel to parties such as ACE Limited’s record acquisition of
Chubb,
Allianz’s sale of the personal lines insurance business of Fireman’s Fund, Pacific Life’s purchase of the life retrocession business of
Manulife, Lightyear Capital’s acquisition of Southwest Insurance Partners,
Swiss Re’s sale of its US Admin Re business, and various transactions and regulatory matters arising out of the sub-prime crisis, including
AIG’s sale of ALICO to
MetLife
Elsewhere, domestic insurers are acquiring or investing in tech firms in order to avoid being left in the dust of the insurtech revolution.
“It [this trend] may be in its infancy, but the established players may be afraid of losing out to technology-driven start-ups,” he explained. “They’re dabbling in this space because they don’t want to miss out on the next wave.
“And as the relationship of technology and analytics to policyholder behaviour increases, there will be added value to what these companies can contribute to insurance delivery methods and sales methods.
“I would not be surprised if there were more and more big ticket M&A deals announced in the insurtech space as these companies continue to grow and gain scale,” he said.
Fettman is an active member of the Committee on Insurance Law of the New York City Bar Association. Last week, Hogan Lovells announced Fettman’s arrival at the firm. He was previously special counsel in Sullivan & Cromwell’s insurance group.
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