Non-life insurance run-off deals review Q2 2023
Four legacy deals, all in the US market, were publicly announced in Q2 2023, with DARAG and Compre completing transactions in a period which is traditionally quieter for deal announcements. It would be easy to infer that the legacy market was enjoying a well deserved rest in Q2, however, from the conversations we have been having with sellers, acquirers and other intermediaries across the market, the reality is quite the opposite. Although not many deals have been announced in the period and despite 2023 seeing some withdrawals from the space, the majority of legacy players expect to see an uptick in announcements in the second half of the year with several people indicating that Lloyd’s activity is already picking up, perhaps sooner than it has done in previous years.
H1 2023 Deal Activity by Region
Transactions by volume: Q2 2023
Transactions by volume: H1 2023
In the absence of published transactions, we have seen increased focus of late on post deal integration by several acquirers which, following a record breaking Q1, have likely achieved a large proportion of their key deal targets very early in the year. If we compare H1 2023 to the same period last year, disclosed deals in the current period have marginally reduced (15 deals vs 18 in H1 2022) but the cumulative value of these deals announced has increased ($6.7bn vs $5.4bn in H1 2022); a signal of the fewer but larger transactions the market has recently experienced.
Many legacy consolidators are also keeping busy by turning their attention to the design and implementation of their target operating model. With increased liabilities and assets under management, structural and operational efficiency is at the forefront of the minds of CEOs and COOs who are seeking to ensure that such growth is matched with operational development. Investment in IT infrastructure (including the consideration of AI tools) is one element of such plans and we’ve heard from a number of players that the steps they have taken in this respect are already delivering value for them on existing portfolios under management as well as in deal processes.
How we can support our clients
The non-life insurance run-off deals team has access to more than 200 specialists who can provide expert support throughout the deal lifecycle, including:
- Commercial, financial, regulatory and operational due diligence
- Deal feasibility studies and strategic options analyses
- Transaction structuring advice
- Preparation of marketing materials and running of disposal process
- Bidder identification and deal negotiation support
- Actuarial support including deal pricing, reserving and capital optimisation
- Post-transaction separation and migration advice
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