Asia Pacific will see (re)insurance M&A bounce back in 2021

For the Asia-Pacific region, investor appetite is expected to bounce back in 2021 more quickly than elsewhere. This may lead to a surge in (re)insurance M&A starting in the first or second quarter of next year according to an analysis by Clyde & Co Hong Kong partner Joyce Chan.

According to her, Asia Pacific has not been impacted by COVID-19 to the same extent as the Americas and Europe. Deaths have been far lower, disruption has been less pronounced and the fallout in terms of financial and job losses has not been as severe.

Despite the pandemic, Asia Pacific saw a rise in the number of M&A involving (re)insurance businesses in the first half of 2020 with 38 deals completed compared to 31 in the previous six months.

“Of course, these transactions would have been negotiated and agreed back in 2019, pre-COVID-19, but the fact they completed suggests an underlying degree of confidence,” said Ms Chan.

She noted that (re)insurers are not ruling out future M&A activity. This is despite the fact that M&A volumes fell back in the second half of this year as many (re)insurers put growth ambitions to one side while they took stock of the impact of the pandemic on operations, claims and investment returns and re-evaluated lines and jurisdictions – intending to redeploy resources to where they would be most profitable.

Source: Asia Insurance Review