International

Global M&A: US insurers on the sidelines

Mergers and acquisition activity (M&A) within the global insurance industry in 2007 were driven by non-US insurers, mainly Western European companies, according to a new report by Conning Research & Consulting. Sherry Manetta, director at Conning, said that only 20% of global primary insurance and reinsurance transactions involved a US company at all. She added that the few US insurers who were active internationally made acquisitions in their existing overseas markets rather than entering new countries. The Conning Research study, “Global Insurance Mergers & Acquisitions: US Insurers on the Sidelines” noted that US insurers concentrated their M&A activities domestically in 2007, especially in the property-casualty and health insurance and managed care sectors. Stephan Christiansen, director of research at Conning, predicted that US firms would continue to be domestically focused in their acquisitions, and would themselves be attractive acquisition targets in 2008. He said that this trend was due in part to the soft dollar and, in the property-casualty sector, to the softening underwriting market. In addition to these factors, he noted that US insurance company stock prices were substantially off their highs of a year ago.