M&A hunters going global
The global consolidation scramble is only going to get more frantic, say industry analysts at KPMG. They say the pace of global consolidation is set to quicken over the next few years, with cashed-up insurers browsing opportunities to expand at home and abroad.
Citing signs of resurgence in the international insurance market, a new KPMG report says merger and acquisition (M&A) activity will be prominent in developing markets such as India, China and eastern Europe as bigger companies in developed markets seek foreign opportunities.
KPMG Transaction Services Partner Kevin Chamberlain says merger and acquisition opportunities in Australia are limited. “The market is already highly concentrated and, as a result, we’re seeing only limited M&A activity in the general and life insurance markets.
“A number of Australian companies are continuing their overseas expansion into US and European markets as well as Asia, as they strive to grow premiums above GDP growth. For example, IAG recently made two acquisitions in the UK and QBE recently made a further acquisition in the US.”
Similar market conditions in the UK are prompting British insurers to cast their eyes overseas for acquisitions, particularly in Europe and Asia.
KPMG Corporate Finance Partner Mark Davison says UK-based insurers – several of which retreated from the local market just a few years ago – are showing “a strong willingness to explore new markets”.
“Overall, further consolidation seems likely, particularly on a cross-border basis, as the industry is under-consolidated globally,” he said.
After a few quiet years, the US market is ripe for another bout of M&A activity. KPMG says market conditions are positive. “The environment seems right – lack of dominance by top companies, pricing pressures and lack of product differentiation.”
Citing signs of resurgence in the international insurance market, a new KPMG report says merger and acquisition (M&A) activity will be prominent in developing markets such as India, China and eastern Europe as bigger companies in developed markets seek foreign opportunities.
KPMG Transaction Services Partner Kevin Chamberlain says merger and acquisition opportunities in Australia are limited. “The market is already highly concentrated and, as a result, we’re seeing only limited M&A activity in the general and life insurance markets.
“A number of Australian companies are continuing their overseas expansion into US and European markets as well as Asia, as they strive to grow premiums above GDP growth. For example, IAG recently made two acquisitions in the UK and QBE recently made a further acquisition in the US.”
Similar market conditions in the UK are prompting British insurers to cast their eyes overseas for acquisitions, particularly in Europe and Asia.
KPMG Corporate Finance Partner Mark Davison says UK-based insurers – several of which retreated from the local market just a few years ago – are showing “a strong willingness to explore new markets”.
“Overall, further consolidation seems likely, particularly on a cross-border basis, as the industry is under-consolidated globally,” he said.
After a few quiet years, the US market is ripe for another bout of M&A activity. KPMG says market conditions are positive. “The environment seems right – lack of dominance by top companies, pricing pressures and lack of product differentiation.”