European insurance M&A deals hit record high as investors shrugged off recession and interest rate fears
The market for M&A deals involving European insurance companies surged in 2022, as private equity funds continued to drive the market forwards, despite the headwinds facing the global economy.
The boom saw investors shrug off rising interest rates to complete a record 435 M&A deals in 2022, up from 285 in 2020 and 379 in 2021, new research from FTI Consulting shows.
The record number of deals came as private equity funds continued pushing ahead with mergers and acquisitions, as they remained attracted to the insurance sector’s scalability.
Private equity firms were involved in 60 per cent of deals of Europe’s insurance sector M&A deals in 2022, accounting for 263 of the 435 deals.
This private equity push saw 42 deals directly driven by private equity firms and a further 222 driven by private-equity backed insurance companies.
Insurance companies efforts to grow their business through consolidation also drove an uptick in dealmaking activity, as insurers completed 172 deals last year, up from 141 in 2021 and 92 in 2020, the research shows.
Strategic buyers, looking to grow their businesses through M&A deals, saw their share of the market grow, from just 22 per cent in 2021 to 40 per cent in 2022.
The report, however, warned the global economic downturn will likely see the boom in M&A deals subside over the coming year, as dealmakers are set face greater struggles in raising the funds required to finance dealmaking activity.
It, however, said that while the boom may subside, M&A in the insurance sector is likely to remain higher than pre-Covid levels.