Hartford, Conn. - If you heed the latest research, you, too, may be a mergers and acquisitions (M&A) statistic soon. Insurance industry mergers and acquisitions increased in 2005 to the highest level since 2001 and may foreshadow an acceleration of activity this year and the next, according to a new study by Conning Research and Consulting, Inc., Hartford, Conn.
Stephan Christiansen, director of research at Conning Research & Consulting says there are a number of factors that lead the consultancy to expect a continuing increase.
"The insurance industry is growing capital faster than revenues, and while revenue growth is anemic, prospective profitability appears relatively solid," he says. "Stock performance for the industry has been relatively strong as well, with each of the sectors outperforming the S&P 500 from 2002 through 2005. In addition, we believe advantages of scale are increasing in the industry for a variety of reasons."
The Conning Research study, "Mergers & Acquisitions and Public Equity Offerings-Fasten Your Seat Belts!" continues Conning's annual review and forecast of insurance industry M&A and its effects on the industry.
"M&A transactions in 2005 increased to 324, and total values of these transactions grew to $50.8 billion, exceeding 2004 levels," said Christiansen. "Public offerings, including secondary offerings, were strong in property-casualty but declined in all other sectors."
For more information about the Conning study, visit the company's web site at www.conningresearch.com.
Source: Conning Research
