(Bloomberg) -- Ace Ltd.’s Evan Greenberg, who has pursued expansion with takeovers in Mexico, Thailand and the U.S., said he expects an increase of insurance industry mergers and acquisitions as competition squeezes profit margins.

Potential buyers “will see no way of getting their growth or actually keeping themselves from shrinking, or margins deteriorating, and they see this as their only option,” Greenberg, the chief executive officer of the Zurich-based insurer, said on a conference call today. “That hunger builds. I expect you’ll see more M&A activity as time goes on. I expect you’ll see more of a feeding frenzy for what comes to market.”

Ace expects to complete the purchase this month of Itau Unibanco Holding SA’s high-risk insurance business in a Brazil deal announced July 4 for about $685 million, Greenberg’s company said yesterday. He said today that while he’s focusing on organic growth he’s prepared to “pull the trigger” on another deal if returns are favorable and it complements his strategy.

The insurer posted record third-quarter operating income yesterday of $2.64 a share. Over the first nine months of year, the company spent just 87.5 cents of every premium dollar at the property-casualty business on claims and expenses. That compares with costs of 88 cents for all of last year and 93.9 cents in 2012.

Greenberg said it will be difficult to maintain current ratios as rivals with less analytical ability and global scale seek to win business.

‘Disrupting Markets’

“There are always a lot of smaller and mid-size players who are just gun-and-run, and they come in and they have a way of disrupting markets” he said.

HCC Insurance Holdings Inc. last month agreed to buy Producers Ag Insurance Group from CUNA Mutual Group for $110 million to diversify into the business of guarding farmers against losses. Deere & Co., the world’s largest maker of agricultural equipment, said Sept. 23 that it hired Citigroup Inc. to look at strategic options for its crop insurer.

Ace slipped 0.5 percent to $106.21 at 11:07 a.m. in New York trading. The company has climbed about 2.6 percent this year, beating the 1.7 percent decline of the 83-company Bloomberg World Insurance Index.

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