The modern M&A landscape is filled with both opportunities and pitfalls for global insurance companies. To navigate this landscape successfully, acquirers cannot divorce their M&A activities (target identification and evaluation) from their broader strategy.
Our recent survey of 200 insurance M&A, corporate development and corporate strategy executives suggests that, insurers are recognizing the need to reevaluate their portfolio of businesses and rationalize their global footprint to strategically determine ‘where they will play’ and ‘how they will win’ in the future.
One of the first steps insurers may want to consider is the development of an enterprise-wide M&A ‘playbook’ to enhance and deepen their evaluation of the strategic fit of a potential acquisition target, throughout the due diligence, deal evaluation, and post-deal integration/separation processes. Creating a robust, strategy-aligned enterprise-wide M&A playbook could help improve deal outcomes over the long-term, versus simply pursuing any or all deal opportunities that present themselves.
In Q4 2016, KPMG commissioned a survey of 200 global insurance executives to learn about their opinions and plans regarding M&A, corporate strategy, and innovation over the coming 12 months. The survey respondents were divided regionally among firms in Asia-Pacific (33%), Europe, Middle East + Africa (33%), and North America (33%) as well as by the segments Life (25%), Non-Life (25%), Reinsurance (25%), and Other (25%). (The segment ‘Other’ encompasses Insurance Brokers and Insurance Services.) Companies needed to have a minimum of US$1.5bn in annual revenue to qualify for participation.