Global insurance mergers and acquisitions (M&A) fell to a 16-year low in 2024 due to high interest rates, geopolitical risks, and stricter regulations, according to Clyde & Co’s Insurance Growth Report. Only 204 deals were completed, down from 346 in 2023, marking the lowest level since 2009.
While traditional M&A activity slowed, the Managing General Agent (MGA) sector expanded as insurers in the US, Europe, and the Middle East increased capital allocations in this area.
Despite weak dealmaking in 2024, a recovery is expected in 2025, led by the US. Lower capital costs and government support for deregulation are set to boost investor confidence, driving activity both domestically and internationally.
Foreign interest in the US Excess & Surplus market is projected to rise, while US insurers, backed by a strong dollar, may target undervalued assets in Europe and beyond.
Technology, including AI and cyber resilience, is expected to play a key role in M&A activity. The evolving regulatory environment will influence deals, acting as both a driver and a barrier.
MGAs are likely to continue growing, while regional consolidation, particularly in the Middle East, remains a trend. A softening global rate environment is also expected to support specialty transactions.
Eva-Maria Barbosa, a partner at Clyde & Co, noted that despite ongoing challenges, dealmaking conditions could improve. The rise of MGAs provides an alternative path for market entry in uncertain regions.
However, traditional M&A could also gain momentum, especially in the US, where deregulation is expected to stimulate activity. Barbosa highlighted that the deal pipeline for early 2025 is already strong.
