Insurance industry mergers and acquisitions (M&A) are at their highest level for years and the trend is set to continue, according to Moody’s.

The growth has been prompted by the weak global economic environment and regulatory changes, spurring many groups to seek scale advantages.

“We expect M&A to halt only if interest rates rise significantly, or equity markets fall dramatically – although even the latter reduces sales prices,” Moody’s Global Insurance MD Simon Harris says.

“We expect interest rates will remain at historically low levels globally and debt-funded M&A will remain attractive for some years.”

Moody’s says insurance M&A value reached more than $US200 billion ($283.46 billion) at the end of the third quarter, as insurers increasingly recognised the need to achieve higher scale or greater efficiency in a low-return investment environment.

This is exacerbated by regulatory changes such as Solvency II in Europe or alterations to the US healthcare regime.

“This combination of factors has led many insurers… to consider disposals or mergers that in many cases present ‘once in a lifetime’ opportunities,” Moody’s says.