KPMG: Execs Expect ‘Significant Uptick’ in M&A
More insurers are eyeing strategic acquisitions this year, according to the 2014 Insurance Industry Outlook Survey conducted by KPMG, the U.S. audit, tax and advisory services firm. In addition, the vast majority are investing in customer programs, talent and technology to grow their businesses and gain a competitive advantage.
In surveying 95 U.S.-based senior insurance executives, KPMG found that
54% of executives indicated that they expect to be involved in a merger or acquisition as a buyer over the next year, up significantly from 34% in KPMG’s 2013 survey.
Of the 54%, 19% said they are “very likely” to be involved in a merger or acquisition as a buyer, up from just 10% last year; and 35% said “somewhat likely,” up from 24% the year before. The number of executives who said they had no plans for M&A activity dropped substantially from 41% in 2013 to 21% in 2014.
“M&A activity is expected to ramp up in the next year as insurers leverage their strong capital positions to seek profitable growth, enter new markets and rationalize non-core operations,” said Laura Hay, national leader of KPMG’s Insurance practice. “P&C insurers are acquiring companies with enhanced technology platforms to gain a competitive edge and view M&A as a crucial means to increase their distribution capacity. Meanwhile, life insurers are expanding their traditional product portfolio to include annuity and investment management capabilities to address the needs of baby boomer retirees.”
To view the full KPMG survey, click here.