Insurance M&A deal volume up 20% year-over-year through mid-June
July 21, 2014 by Jan Haider Kiani
Year-to-date through June 20, the insurance mergers and acquisition (M&A) market witnessed 160 deal announcements, compared to 134 deals over the same period of 2013 — an increase of roughly 20%, according to SNL Financial.
The 2014 first quarter saw 100 insurance deals announced, compared to 72 deals in the year-ago period. Sixty insurance deals were announced in the second quarter through June 20, slightly fewer than the 62 deals announced over the same period of 2013.
Year-to-date through June 20, a total of 34 deals involving insurance underwriters were announced with an aggregate deal value of $10.65 billion. While deal volume is down significantly so far in 2014 compared to the year-ago period, which saw 46 insurance underwriter deals, aggregate deal value is up roughly 140% year-over-year through June 20. The managed care and life and health sectors have seen six and eight deals, respectively, announced so far in 2014. The P&C sector saw 20 deals year-to-date through June 20.
The largest underwriter deal year-to-date through June 20 in terms of deal value is Dai-ichi Life Insurance Co. Ltd.’s announced acquisition of Protective Life Corp. The deal, announced June 3, was valued at $5.58 billion and has been approved by both companies’ boards of directors. It is expected to close by the end of 2014 or in early 2015, subject to the approval of Protective Life’s stockholders, regulatory approvals in Japan and the U.S. and other customary closing conditions.
The second-largest deal by deal value is the pending acquisition of Wilton Re Holdings Ltd. by Canada Pension Plan Investment Board and the management group of Wilton Re Holdings Ltd. The deal, announced March 21, was valued at $1.8 billion.
TPG Capital Management LP’s agreement to acquire Warranty Group Inc. from Onex Corp. for $1.23 billion ranks as the third-largest deal through June 20 by deal value.
The insurance broker sector saw 126 deal announcements year-to-date through June 20, including 76 deals in the first quarter and 50 deals so far in the second quarter. In comparison, 88 insurance deals were announced in 2013 between Jan. 1 and June 20. With 14 announced insurance broker acquisitions, Hub International Ltd. has been the most active buyer so far in 2014, in terms of number of acquisitions. Arthur J. Gallagher & Co. and AssuredPartners Inc. announced 12 and 11 insurance broker deals, respectively.
In the P&C space, J.P. Morgan Securities LLC led the pack of top financial advisers year-to-date in terms of deal value and deal volume, with three deals, including TPG Capital’s announced acquisition of Warranty Group, garnering the company deal credit as assigned by SNL of $1.37 billion. The other two P&C deals on which J.P Morgan advised include ACP Re Holdings LLC’s planned acquisition of Tower Group International Ltd. for $143.3 million and Catalina Holdings (Bermuda) Ltd.’s pending acquisition of SPARTA Insurance Holdings Inc.
Goldman Sachs Group Inc. landed in the top spot in the life and health sector in terms of deal value and number of deals, having served on two deals and earning deal credit of $7.38 billion. Goldman Sachs acted as financial adviser on all three of the largest underwriter deals by value announced so far in 2014.
Year-to-date through June 20, Kaye Scholer LLP and Skadden Arps Slate Meagher & Flom LLP were tied at the top spot in the list of legal advisers in the P&C space in terms of deal value. Both firms acted as legal counsel to TPG Capital Management in its planned acquisition of Warranty Group. Kaye Scholer LLP served as legal counsel to Warranty Group, and Skadden Arps Slate Meagher & Flom LLP acted as legal counsel to TPG Management. Skadden Arps Slate Meagher & Flom also advised on two other P&C deals year-to-date, giving it the top spot on the rankings of legal advisers in terms of number of deals.
In the life and health sector, Debevoise & Plimpton LLP and Sutherland Asbill & Brennan LLP took the top spot in 2014 through June 20, in terms of deal value and deal count, respectively. Debevoise & Plimpton advised on three life and health deals, earning deal credit of $7.95 billion, while Sutherland Asbill & Brennan LLP provided legal services to four life and health deals, earning deal credit of $2.07 billion.
Jan Haider Kiani is a senior analyst for SNL Financial, and this article appeared on the SNL Financial website.
