From ACE to XL, 2015 Was a Year of Major Insurance Carrier M&As

Signs that 2015 would be an active year for property/casualty mergers and acquisitions (M&A) were apparent in late 2014.

As 2014 closed, there was a rush of M&A activity. The deals that closed out 2014 included: Fosun International buying Meadowbrook Insurance; RenaissanceRe acquiring Platinum Underwriters; Progressive Corp. upping its ownership in homeowners specialist ARX to 67 percent from five percent; ACE’s purchase of Fireman’s Fund’s U.S. high net worth business; and Iowa’s Farmers Mutual buying fellow crop insurer John Deere Insurance.

As 2015 got underway, analysts speculated that the strong close in 2014 could be a harbinger of more to come. They were right.

It was a year of major deals headlined by the flawlessly managed ACE-Chubb marriage and the birth of the new Chubb.

Tokio Marine buying HCC Insurance Holdings and XL’s acquisition of Catlin got press.

The EXOR-PartnerRe deal became very contentious and almost didn’t happen.

Several insurers uprooted from crop insurance, allowing others to step in.

While the big deals got the spotlight, there were also many smaller national, regional and state carrier M&As that will affect local personal and commercial lines insurance markets.

In 2015, according to a Willis Towers Watson survey, $120.5 billion worth of deals were completed in the first three quarters of the year — nearly three times the amount recorded in 2014. Consolidation, particularly in the U.S. and specialty lines, spurred a rise in the number of mega deals to four worth more than $5.4 billion, compared to just one in 2014, and 25 deals worth more than $540 million.

Some of the most interesting M&A news in 2015 was about deals that did not happen but could in 2016: Carl Icahn’s campaign to split American International Group (AIG) into three. Stay tuned.