Asia Pacific saw an increase in the number of mergers and acquisitions involving re/insurance businesses in the first half of 2020, with 38 deals completed compared to 31 in the previous six months, despite the COVID-19 pandemic, notes global law firm Clyde & Co.
In its “Insurance 2021 – the year ahead” series, Clyde & Co said, “Of course, these transactions would have been negotiated and agreed back in 2019, pre-COVID-19, but the fact they completed suggests an underlying degree of confidence.”
Although M&A volumes fell back in the second half of this year as many re/insurers put growth ambitions to one side while they took stock of the impact of the pandemic on operations, claims and investment returns and re-evaluated lines and jurisdictions with a view to redeploying resources to where they would be most profitable, they are not ruling out future M&A activity.
Asia Pacific has not been impacted by COVID-19 to the same extent as the Americas and Europe. Deaths have been far lower, disruption has been less pronounced and the fallout in terms of financial and job losses has not been as severe. As a result, Clyde & Co expects that investor appetite will bounce back in 2021 and that it will do so more quickly in the region than elsewhere, likely leading to a surge in M&A starting in the first or second quarter.