Insurance Mergers Plunge to Lowest Levels Since 2009, Report Finds

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Apr 20, 2025
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Insurance Mergers Plunge to Lowest Levels Since 2009, Report Finds

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Insurance Company Mergers Take a Big Hit: Lowest Numbers Since 2009

The global insurance industry just experienced its steepest drop in mergers and acquisitions (M&A) since the financial crisis of 2008. According to the latest Insurance Growth Report 2025 from law firm Clyde & Co, the number of completed deals fell sharply in 2023. This news shows that insurance companies are being more cautious than ever before.

Key Facts: Sharp Decline in Deal Activity

  • The number of M&A deals in the insurance sector dropped by 14% in 2023.
  • There were 385 deals in 2023, compared to 449 deals in 2022.
  • This is the lowest annual total for insurance M&A since 2009.
The drop was especially noticeable in certain regions:

  • Americas: 20% drop in deals
  • Europe, Middle East, and Africa (EMEA): 14% drop
  • Asia-Pacific: 6% drop

Why Are There Fewer Deals?

Clyde & Co says that several challenges are making insurance companies and investors more careful about merging or buying other companies. These challenges include:

  • Economic uncertainty: It’s harder to predict how the economy will perform.
  • Rising interest rates: Borrowing money costs more, so big deals are less attractive.
  • Inflation: Prices are going up, which affects profits and business planning.
  • Geopolitical tensions: Global issues like war, trade disputes, and political instability make companies more cautious.
Ivor Edwards, head of Clyde & Co’s European corporate insurance group, explained, “The insurance industry is facing a unique set of challenges that have combined to create a more difficult environment for deal-making. While there is still appetite for strategic acquisitions, particularly in growth markets and specialist lines, overall activity has slowed as companies focus on organic growth and operational resilience.”

Bright Spots: Where Deals Are Still Happening

Even with the overall drop, there are a few areas where deals are still strong. The report points out that some types of insurance businesses are still attracting buyers, such as:

  • Insurtech companies: These are technology-driven insurance businesses.
  • Specialty insurance: Companies that offer unique or hard-to-find coverage.
  • High-growth markets: Areas and countries where insurance is expanding quickly.
According to the report, these “pockets of activity” show that while most companies are being careful, some are still willing to make big moves where they see opportunity.

Deal Sizes Remain Strong

Interestingly, even though the number of deals dropped, the average size of each deal stayed about the same. This means that:

  • Companies are still making large, important deals, even if there are fewer of them.
  • The value of individual deals hasn’t fallen much, showing ongoing interest in big, strategic mergers.

What Could Happen Next?

The report suggests that things may start to change later in 2025. If economic conditions become more stable—like if interest rates stop rising and businesses feel more confident—we might see more deals again. Clyde & Co also points out that:

  • Regulatory changes (new laws and rules) could create new chances for mergers.
  • Technological innovation might encourage companies to join forces to stay competitive.
Edwards added, “We anticipate that once market conditions become more favorable, there will be a resurgence in M&A activity as insurers seek to capitalize on new opportunities and address evolving risks.”

Long-Term Outlook Remains Positive

Even though 2023 was a tough year for insurance company mergers and acquisitions, the report remains optimistic. The basic health of the insurance sector is still strong, and experts believe that companies will keep looking for smart ways to grow when the time is right.

In summary, while insurance M&A activity is at its lowest since the 2009 recession, there are signs that things could turn around. Companies are being careful now, but the future may hold new opportunities as the economy gets better and the industry adapts to changes.

 
Reading through the report, I’m struck by how much this echoes past cycles in healthcare and insurance more broadly—when uncertainty rises, companies tend to pull back and look inward. Makes sense that rising interest rates and inflation would put the brakes on M&A, since deals are riskier and financing is tighter. What caught my attention
 
That shift toward insurtech and specialty lines makes sense—adapt or get left behind. Curious if regional regulations are making it even harder for companies to merge right now?