Insurance mergers and acquisitions (M&A) hit a historic low in the first half of 2025. Factors like geopolitical tensions, economic instability, and uncertainty about U.S. policies under President Donald Trump have made it tough for companies to make deals.
Only 95 insurance M&A deals were completed from January to June 2025. That’s a drop from 106 deals during the same period in 2024 and well below the 10-year average of 192 deals. This slowdown shows that many companies are being cautious, choosing to conserve their capital and focus on smaller acquisitions instead of big, strategic moves.
Peter Hodgins, a partner at Clyde & Co, pointed out that there has been a noticeable increase in discussions about potential deals compared to a few months ago. He believes that if the economic and political environment remains stable, more deals could happen in the latter part of the year.
The first half of 2025 has been marked by a sense of restraint among insurers. Hodgins noted that many carriers are holding back on transactions due to the uncertainties surrounding the upcoming U.S. election and the broader political landscape. Dealmakers are waiting to see how the economy and policies evolve before committing to long-term strategies.
Another challenge in the M&A market has been the difficulty in agreeing on valuations. High inflation, rising interest rates, and volatile capital markets have contributed to this issue. Some deals have stalled because buyers and sellers have different expectations. For instance, sellers in regions like Southeast Asia often value their businesses based on perceived market access rather than their actual performance, which complicates negotiations.
Despite these challenges, Hodgins remains hopeful for a resurgence in M&A activity later in 2025. He believes there is pent-up demand, with many companies preparing for potential acquisitions. As the policy landscape becomes clearer, the pressure to grow could push carriers to act.
While large, cross-border deals have been scarce, a few notable transactions did occur in the first half of the year. Sentry Insurance acquired The General for $1.7 billion, and Markel purchased the UK-based marine managing general agent (MGA) MECO. Additionally, Zurich announced its acquisition of AIG’s Global Personal Travel Insurance unit for $600 million, signaling that some companies are gearing up for a more active second half.
Hodgins highlighted that MGAs remain attractive for many insurers and private equity firms. They provide a cost-effective way to enter new markets, and interest in building portfolios of MGAs is growing.
Looking to the future, Hodgins expects insurers to focus more on high-growth regions, especially in Southeast Asia, the Middle East, and parts of Africa. These areas offer opportunities due to favorable demographics and evolving regulations that support insurance growth.
As 2026 approaches, Hodgins anticipates continued strategic acquisitions and an increased interest in international expansion. There will always be demand for well-managed businesses with strong data. Growth-oriented insurers will likely seek opportunities in emerging markets, particularly in areas recovering from recent disasters.