ACORD Study Reveals Mixed Results in Carrier Mergers & Acquisitions

ACORD’s latest study on Carrier Mergers & Acquisitions has revealed some interesting insights into the long-term value created by these transactions. With only 52% of the largest M&A deals from the last decade proving to be successful in the long run, the study has shed light on the factors that contribute to the success or failure of such transactions.

The study, which screened nearly 15,000 transactions valued at $1 billion or more, found that mid-sized deals performed better than the largest or smallest transactions. According to Bill Pieroni, President and CEO of ACORD, the size of the deal plays a crucial role in determining its success. While large deals may grab headlines, they are not always the most likely to create value in the long term. On the other hand, small deals may not receive enough attention and oversight to be successful.

Pieroni emphasized the importance of insurers carefully considering their ability to manage existing operations without disruption while integrating the benefits of the transaction. The study also highlighted the variations in long-term performance across different lines of business, with P&C carriers experiencing higher-than-average returns after M&A transactions, particularly those motivated by diversification.

However, Life insurers faced challenges regardless of the rationale behind the deal, with only 36% of all life M&A transactions creating value. Reinsurers also saw mixed results, with high performance limited to deals motivated by core expansion.

Overall, the study provides valuable insights for insurers considering M&A transactions, emphasizing the importance of strategic planning and careful consideration of the potential risks and rewards involved. The findings are set to be officially presented at ACORD Industry First on May 21st, offering industry professionals the opportunity to delve deeper into the implications of these results.