Conning: Life-Annuity and Health M&A Continued as Insurers Looked for Growth in 2019; Muted Growth in 2020 Projected

In 2019, M&A activity involving acquisitions of life-annuity and health insurers in 2019 were slightly higher than in 2018, driven by broad economic, regulatory, competitive, technological, and demographic trends.

"Slightly favorable economic conditions were the primary drivers of insurance M&A in 2019," said Scott Hawkins, a Director, Insurance Research at Conning. "Low interest rates supported debt-financed M&A activity during the year. For health insurance, vertical integration continued as a theme, as well as insurers looking to capture blocks of Medicare or Medicaid business."

The Conning study, "Global Life & Health Insurance M&A in 2019 - The Quest for Growth Continues" tracks and analyzes U.S. and non-U.S. life, annuity, and health mergers and acquisitions activity for insurers, distributors, and service-related firms. Specific transactions are detailed, and trends are analyzed across all segments.

"In 2019, external capital continued to invest in the M&A of companies or blocks of business. This was most easily seen among the life-annuity industry as liability platforms continued to be established," said Steve Webersen, Head of Insurance Research at Conning. "Looking ahead at 2020, the disruption caused by COVID-19 is likely to mute M&A activity. That said, firms with available capital may be positioned to continue using M&A to increase growth as the economic environment settles. Additionally, in light of weaker capital positions resulting from economic turmoil, insurers will be reevaluating their core competencies and competitive positions throughout the second half of 2020."