Deal activity in the insurance sector has seen a decline in the number of transactions, but the total value of those deals has increased significantly. According to a recent analysis by PwC, the total value of insurance deals reached $30 billion from 209 transactions over a six-month period ending on May 15. This is a notable increase compared to the previous six months, which recorded $20 billion from 297 deals.
Mark Freidman, who leads insurance deals at PwC, highlighted that the insurance industry continues to draw interest from investors. He noted that the sector has shown resilience despite tough market conditions. However, he also pointed out that uncertainty surrounding the economy and government policies has led to a drop in the number of deals being completed.
Insurance brokerage activity remains robust, largely driven by organic growth from rising insurance rates. Notable deals during this period included Arthur J. Gallagher & Co.’s acquisition of AssuredPartners for $13.5 billion. Another significant transaction was Brown & Brown’s announcement of its plan to acquire the parent company of Risk Strategies and One80 Intermediaries for approximately $9.8 billion, although this deal was finalized after the analysis period.
PwC also mentioned a backlog of insurance initial public offerings (IPOs). Some companies are considering a dual exit strategy, weighing options between going public or pursuing private mergers and acquisitions. However, the scale of some consolidators in the distribution space has made complete exits challenging.
Despite the slowdown, there are signs of renewed activity. Recently, Aspen raised $397.5 million, and American Integrity filed for an IPO. In June, both insurtech Slide and E&S insurer Ategrity announced their own IPO plans. This uptick suggests that while the overall deal volume may be down, the market is still finding ways to thrive.