APAC insurance M&A drops 25% as firms focus on organic growth

Globally, M&A activity hit a 16-year low in 2024.

Asia-Pacific’s insurance carrier mergers and acquisitions (M&A) activity fell by 25% in 2024 compared to 2023 as established firms prioritised organic investment, focusing on data analytics amidst geopolitical uncertainties, according to Clyde & Co’s annual insurance Growth Report. 

Globally, M&A activity hit a 16-year low in 2024, with only 204 transactions completed, down from 346 in the previous year.

This marked the lowest level since the report's inception in 2009. High interest rates, geopolitical instability, and increased regulatory scrutiny dampened insurers’ appetite for deals throughout the year. 

Regional consolidation in markets like the Middle East is expected to continue, whilst a softer global rate environment may drive specialty acquisitions. 

Whilst traditional dealmaking was subdued, the global managing general agent (MGA) sector saw increased investment as carriers in the US, Europe, and the Middle East shifted capital to this space. 

The outlook for 2025, however, is more optimistic. Dealmaking is expected to rebound, driven primarily by the US, where renewed investor confidence is being bolstered by the government’s focus on deregulation and lower capital costs. 

Foreign interest in the US Excess & Surplus market is also anticipated to grow, whilst US carriers, benefiting from a strong dollar, may pursue undervalued assets abroad, particularly in Europe. 

Technology considerations, including cyber resilience, are likely to play a more prominent role in M&A this year, as the insurance sector navigates both the risks and opportunities posed by advancements such as artificial intelligence. 

An increasingly fragmented global regulatory landscape could both encourage and hinder M&A activity, depending on the region.

Eva-Maria Barbosa, Partner at Clyde & Co, noted that whilst challenges from 2024 persist, the US market’s deregulation efforts could reignite traditional dealmaking. 

She also highlighted the ongoing rise of MGAs as a strategic response to uncertain markets and industries.