Insurance M&A

Insurance company, insurance agent and insurance broker merger and acquisition (M&A) activity has been increasingly strong and is expected to get stronger over the next year or so.  Insurance company M&A activity hit a recent record in 2005, and a recent research report suggests the trend may accelerate this year.  Conning Research and Consulting released its report, Mergers & Acquisitions and Public Equity Offerings-Fasten Your Seat Belts!, suggests that an acceleration of M&A activity may occur this year and through next year (see here, and here and here).  The study’s author, Stephan Christiansen, said:

There are a number of factors that lead us to expect a continuing increase. The insurance industry is growing capital faster than revenues, and while revenue growth is anemic, prospective profitability appears relatively solid.

The activity is also predicted be strong on the agents and brokers side of the table (see here).  Kevin Donoghue of Mystic Capital Advisors Group said in an Insurance Journal interview:

The money came off the shelf and is currently being deployed into a number of different acquisition areas, both in the retail and on the managing general agent side of the business.