Deal activity in the insurance sector slowed in the Spring of 2020, but came roaring back in the second half of the year. From the end of June to mid-November, there were 222 announced transactions, with $10.9 billion in announced deal value. Standouts included mega-deal announcements of KKR’s acquisition for Global Atlantic for $4.0 billion, Allstate, Inc,’s acquisition of National General Holdings Corporation for $3.7 billion and Great-West Lifeco Inc.’s acquisition of MassMutual’s retirement services business.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021.
PwC's Deals Sector Leader John Potter discusses the trends driving deals and outlook for 2021. Explore national deals trends
We expect strong M&A activity to continue as we head into 2021, driven by divestitures of non-core businesses, continued competition for distribution targets, the hardening of specialty P&C markets and significant levels of deployable capital.
A “lower for longer” interest rate environment will continue to put pressure on investment returns and profits, especially for carriers managing capital intensive segments or blocks of business. As these companies re-assess their core portfolios, we expect further divestitures, particularly within the life and annuity sub-sector.
Transaction multiples in the brokerage space continue to be an indicator of the level of competition among private equity firms and other would-be acquirers. We expect distribution deals to dominate the sector’s announced transaction volumes in the coming year.
“Dealmaking roared back to life in the second half of 2020, signaling more activity in the year ahead.”
Insurance Deals Leader, PwC US
Financial Services Deals Leader, PwC US