News Column

A.M. Best Special Report: Life/Health M&A

August 5, 2014



ENP Newswire - 05 August 2014

Release date- 04082014 - Global merger and acquisition (M&A) activity in the life/ health (L/H) industry during the first six months of 2014 is on track, in terms of total dollar value, to be consistent with full-year 2013 reported activity.

According to A.M. Best research, 14 L/H deals were announced globally in the first half of 2014, with a total disclosed value of approximately USD 10.6 billion, a little more than half of the approximately USD 18 billion in activity for all of 2013.

Much of the recent activity in the L/H segment continues to reflect: industry consolidation, some of which is larger players looking to gain additional scale, as was the case of Dai-ichi of Japan's acquisition of Protective Life; veteran acquirers entering into new markets as a means to diversify globally; and the influx of new participants into existing markets primarily backed by private-equity organizations.

Factors driving the consolidation of the industry include:

The impact of the sustained period of low interest rates;

Regulatory challenges causing insurers to focus on less capital-intensive and market sensitive products; and

Lower expected margins in certain lines of business.

From the sell side, much of the M&A activity has been driven by the desire to 'de-risk' balance sheets and focus on core competencies. Product mix has gradually shifted toward offerings that are less capital intensive and have less generous benefits.

To access a copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=227389&AltSrc=26 .

A.M. Best Company is the world's oldest and most authoritative insurance rating and information source.

A.M. Best's credit ratings are independent and objective opinions, not statements of fact. A.M. Best is not an Investment Advisor, does not offer investment advice of any kind, nor does the company or its Ratings Analysts offer any form of structuring or financial advice. A.M. Best's credit opinions are not recommendations to buy, sell or hold securities, or to make any other investment decisions. View our entire notice for complete details.

A.M. Best receives compensation for interactive rating services provided to organizations that it rates. A.M. Best may also receive compensation from rated entities for non-rating related services or products offered by A.M. Best. A.M. Best does not offer consulting or advisory services. For more information regarding A.M. Best's rating process, including handling of confidential (non-public) information, independence, and avoidance of conflicts of interest, please read the A.M. Best Code of Conduct.

A.M. Best - Europe Rating Services Limited (AMBERS), a subsidiary of A.M. Best Company, is an External Credit Assessment Institutions (ECAI) in the European Union (EU). Therefore, credit ratings issued by AMBERS may be used for regulatory purposes in the EU as per Directive 2006/48/EC.


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Source: ENP Newswire


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