July 3, 2018 by Greg Meckbach
Brokers can expect to see a major carrier consolidation deal this year, assuming the prediction of a major mergers and acquisitions (M&A) advisory firm holds true.
Of the top 10 Canadian P&C insurers, “it could be expected that a few of them are looking at mergers and acquisitions intensely,” Georges Pigeon, Montreal-based partner with KPMG’s transaction services group, told Canadian Underwriter in a recent interview.“My expectation would be that some of them would contemplate an acquisition in the coming years if the right opportunity comes along.”
He made his comments in an interview about a June KPMG International report, Accelerated evolution – M&A, transformation and innovation in the insurance industry. In that report, 80% of insurance executives surveyed worldwide “expect to seek one to three acquisition targets or partnership opportunities over the next three years,” KPMG stated.
“The Canadian P&C marketplace has seen over the last 10-15 years what I would term a major acquisition of a carrier,” an average of one major deal a year, Pigeon said in an interview June 28. He predicts this trend could continue, although he did not go so far as to speculate on specific carriers.
The KPMG survey of 200 insurance executives worldwide “confirms that the majority of insurance companies are actively seeking M&A, partnerships, and investment opportunities to transform their business and operating models, and to gain access to innovation capabilities and emerging technologies,” wrote Laura Hay, global head of insurance and Ram Menon, global head of insurance deal advisory for KPMG, in the forward to the Accelerated evolution report.
In Canada, the question is “whether anyone wants to sell, and that will drive whether we see another transaction,” Tim Prince, a Toronto-based partner with KPMG Canada’s advisory service, said June 28 in an interview.
There have been several major deals in Canada over the past six years.