How can M&A offset slower insurance growth?

Scale and operational strength are becoming table stakes.

Asia‑Pacific insurers expect mergers and acquisitions (M&A) to rebound after dealmaking fell to a five‑year low in 2025, as rising costs, tighter regulation and heavy technology spending push firms to seek scale through consolidation.

Scale and operational strength are becoming table stakes, according to Clearwater Analytics Holdings, Inc.

Almost all executives surveyed by Clearwater Analytics said they expect M&A to increase over the next three years, signalling growing urgency among insurers to bulk up as organic growth slows and operating costs rise.

The survey covered 150 senior executives in Australia, Hong Kong, and Singapore, representing firms managing $3.8t in assets.

Insurers are increasingly using acquisitions to gain scale, spread risk, and modernise operating platforms, rather than relying on balance‑sheet growth alone.

Rising regulatory demands, investment complexity, and data‑infrastructure costs are pushing firms towards consolidation, executives said.

The outlook contrasts with recent deal data. Insurance mergers across the Asia‑Pacific region fell in 2025 as valuation gaps, regulatory uncertainty, and financing conditions slowed transactions.

S&P Global Market Intelligence logged 71 insurance deals in the region last year, down from 86 in 2024 and the weakest total in five years.

Japan led by volume with 17 transactions, followed by India with 13. Deal numbers in Australia and New Zealand fell to 16 from 26 a year earlier, whilst Southeast Asia recorded nine deals, down from 18.

India accounted for the most disclosed value, totalling about $2.87b in 2025. The biggest transaction was Allianz SE’s $2.78b sale of its combined 23% stakes in Bajaj Allianz General Insurance Co. Ltd. and Bajaj Allianz Life Insurance Co. Ltd., part of the German insurer’s exit from the Indian market.

S&P said Allianz is expected to sell its remaining 3% stake by the second quarter, completing the withdrawal.

The only other Asian insurance deal above $1b last year was E.SUN Financial Holding Co. Ltd.’s pending $1.39b acquisition of Taiwan‑based Mercuries Life Insurance Co. Ltd.

Smaller cross‑border deals continued, including Chubb Ltd.’s $321m purchase of Thailand’s LMG Insurance PCL and Asahi Mutual Life Insurance Co.’s pending $170m acquisition of MVI Life Co. Ltd. in Vietnam.

Premium growth moderated in 2025 as economic headwinds, rising competition and higher operating costs weighed on expansion across many Asia‑Pacific insurance markets, according to Gallagher Re.

Clearwater said insurers expect slowing deal activity to give way to a consolidation phase, as firms prioritise domestic scale, broader product reach and stronger technology platforms in increasingly competitive local markets.

Questions to ponder

• How can insurers close valuation gaps and navigate regulation to turn M&A intent into completed deals?
• How can firms use consolidation to build technology and operational strength without eroding returns?