Region sees increase in cross border M&A deals in 2019

Asia Pacific saw the biggest upwards shift in terms of cross border deals in 2019, both inbound and outbound, according to global law firm Clyde & Co.

In its “Insurance Growth Report – Balancing risk and reward- 2020”, Clyde & Co states that while a number of international players have exited, or put their assets in the region up for sale as they seek to redeploy capital and focus on their core businesses, a number of markets remain attractive to those with growth ambitions.

Japanese acquirers have long been active overseas as they seek opportunities beyond their mature domestic market and this trend continued in 2019, with acquisitions in fast growing emerging markets including India, Vietnam and Myanmar.

As well as Southeast Asia, India has seen a spike in M&A activity on the back of regulatory changes, a trend which Clyde & Co expects to continue.

Caveat

The caveat to this forecast is that the length and severity of the Wuhan coronavirus outbreakl has the potential to deter investors and damage insurers' balance sheets, the law firm says.

Overall, though, the Asia Pacific was not the most active M&A insurance market last year, as indicated by the details of the number of deals below:

The volume of M&A deals in the insurance field worldwide rose 10% in 2019 to 419. The 2019 number was a four-year high.M&A activity in the first half of last year was driven by a spike in deal making in Europe that had previously been on hold due to Brexit preparations. M&A activity fell during the last six months of 2019 although activity still remained strong compared to recent years. There were 20 deals valued in excess of $1bn in the sector last year, spread across all regions. Among the largest were Prudential’s $3.5bn acquisition of Assurance IQ and FWD Group’s $3bn acquisition of Thailand’s SCB Life Assurance.g2020Indications are that investors across some markets will be adopting a more cautious approach in the coming months, that may lead to a dip in the number of M&A deals being completed in some markets this year, says the report.

Source: Asia Insurance Review

Region	2019	2018	% change
Americas	182	189	-3.7
Europe	155	122	27
Asia Pacific	69	59	16.9
MEA	12	8	50
Global	419	382	9.7