Report finds high levels of insurance sector merger and aquisitions activity

A U.S. report recently released by Celent found that of the merger and acquisition (M&A) activity in 2006 in the service sector, nearly 20% of those were in the insurance IT and services sector.
Driven by an influx of private equity, the need of mature companies to buy growth, and the desire to expand capabilities and solution offerings without long and protracted research and development processes, the level of M&A activity across financial services continues to grow, a Celent release says.
Among the nearly 400 deals recorded by investment bank Marks Baughan & Co. and analyzed in the report, there were at least 66 significant M&A deals in insurance IT and services in 2006, with a recorded valuation of more than US$3.6 billion [approximately Cdn$4.2 billion].
Of these, the majority involved large insurance brokerages such as Arthur J. Gallagher & Co., Brown & Brown, Hilb, and Rogal and Hobbs Company buying smaller specialized players, according to M&A Deals in Insurance IT and Services: 2006.”
Among these 66 insurance-related deals, there were more than a dozen specifically related to software and technology, many of these involved property/casualty policy administration systems.
Celent predicts overall activity, and especially software and technology-related activity, to remain high in 2007.