The world’s biggest insurers are looking to this region for their next acquisitions, according to international analysts KPMG.

The latest research into the global insurance market has found insurers are weighing up merger and acquisition options, with about 40% of them prepared to spend up to $US500 million ($650 million) over the next three years.

Some have aquisition budgets of more than $US3 billion ($3.9 billion).

The survey, Run For Cover, involved more than 200 leading insurers worldwide. It paints a picture of a market on the verge of extensive consolidation.

Companies are also keeping their eyes open locally, but the Asia Pacific region seems to be the most likely theatre.

Just 19% of insurance companies have made acquisitions there in the past three years. But with substantial growth expected there over the next few years, that lack of interest is not likely to last.

One company already sizing up opportunities is local giant Insurance Australia Group (IAG). CEO Michael Hawker has signed a memorandum of understanding with China Pacific Property Insurance (CPPI). If all goes well, IAG will take a 40% stake in the insurer for up to $550 million.

Part of the China Pacific Insurance Corporation, CPPI has about 11% of the highly concentrated Chinese property insurance market.