Mergers and acquisitions (M&A) within the Asia-Pacific insurance sector declined by 25% in 2024, as established firms shifted their focus to organic growth strategies, particularly investing in data analytics amid ongoing geopolitical challenges. This drop is part of a broader global trend, with M&A activity reaching a 16-year low worldwide, according to Clyde & Co’s annual Insurance Growth Report.
Globally, only 204 M&A transactions were completed in 2024, down from 346 in 2023, marking the lowest annual figure since the report’s inception in 2009. Contributing factors to the decline included high interest rates, geopolitical instability, and increased regulatory scrutiny, which collectively dampened insurers’ willingness to pursue deals.
While the global M&A landscape saw a slowdown, regional consolidation is expected to persist, particularly in markets like the Middle East. A softer global rate environment may also drive more specialty acquisitions.
Although traditional dealmaking slowed, the global managing general agent (MGA) sector experienced increased investment. In particular, carriers in the US, Europe, and the Middle East directed more capital into MGAs, indicating a strategic shift in response to current market conditions.
Looking ahead, the outlook for 2025 is more optimistic. A rebound in M&A activity is expected, particularly in the US, where renewed investor confidence is being bolstered by government efforts to reduce regulatory burdens and lower capital costs. Foreign interest in the US Excess & Surplus market is likely to rise, while US carriers, benefiting from a strong dollar, may seek to acquire undervalued assets abroad, especially in Europe.
The role of technology in M&A is also expected to increase in 2025, with cyber resilience and advancements such as artificial intelligence likely to become more prominent in dealmaking. However, the evolving global regulatory landscape may present both opportunities and challenges for M&A activity, depending on the region.
Eva-Maria Barbosa, Partner at Clyde & Co, commented that while the challenges of 2024 persist, the US market’s deregulation efforts could provide the impetus for a resurgence in traditional M&A activity. She also emphasized the growing importance of MGAs as a strategic response to an uncertain global market.
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