Conditions favorable for reinsurance mergers & acquisitions
Tuesday, 10 11 2016, Category: Insurance and Reinsurance, Country: Asia
Two deals announced last week point to a resurgence in reinsurance M&A following a drop in valuation multiples and as firms seek diversification and scale in a tough market, Fitch Ratings says.
Reinsurance M&A stalled this year after a spike in valuations, with several transactions pricing at around 2x book value and probably putting off other potential buyers. But Japanese non-life firm Sompo Holding's USD6.3bn agreement to buy Bermuda's Endurance Specialty Holdings represents a 1.4x multiple. Similarly, Chinese state-owned companies Shenzhen Qianhai Financial Holdings and Shenzhen Investment Holdings' USD1bn acquisition of Singapore's Asia Capital Reinsurance is at a 1.3x multiple.
Source: Business Wire