mergers & acquisitions

White Mountains has purchased industry loss warranties (ILW’s) as a way to protect the balance sheet of its Sirius International Insurance Group, Ltd. unit, as it awaits the completion of Sirius’ sale to Chinese investment group China Minsheng Investment Corp., Ltd.

Increasing your attractiveness to third-party capital investors has become a key driver for mergers and acquisitions in reinsurance, as access to efficient capital becomes increasingly important for reinsurers, according to A.M. Best.

Persistent pressures in the global reinsurance market signal a continuation of the merger and acquisition (M&A) trend currently sweeping through the industry, leading Stephen Catlin, of XL Catlin, to urge those involved in M&A activity to do so for more than just scale.

Increased merger and acquisition (M&A) activity, deal value and deal size during the first-half of 2015, highlights a return of the ‘mega deal’, but what implications might market consolidation have for alternative reinsurance capital and ILS participants?

Demonstrating that M&A in insurance and reinsurance is not always the answer, Zurich Insurance Group has announced that it has decided against making the expected bid for RSA Insurance Group, as it decides instead to focus on profitability.

During the current protracted soft reinsurance market the expectation is that greater scale and diversity will become increasingly important attributes of the reinsurers that succeed, however it remains to be seen what value the current round of M&A deals deliver.

After the rumours began to fly last night, very quickly it has become official. Japanese insurance group Mitsui Sumitomo and London headquartered insurance and reinsurance specialist Amlin, have reached an agreement which will see Mitsui Sumitomo buy Amlin for approximately $5.33 billion.

According to a report in the Japanese Nikkei newspaper, London headquartered insurance, reinsurance and third-party ILS capital management stakeholder Amlin is being pursued by Japanese insurance group Mitsui Sumitomo.

As global reinsurance prices continue to soften, underwriters in the space are faced with pressures leading to a search for scale and diversification. But analysts at Bernstein have warned that firms that are highly diversified could ultimately prolong pricing pressures.

Merger and acquisition activity among global reinsurance firms is expected to continue through the rest of 2015 and into 2016, with only the strongest expected to have the best future prospects, according to rating agency Standard & Poor’s.