Insurance executives want acquisitions to transform their organisations for the future, rather than simply enhance current operations, KPMG says.

A global survey of 200 executives finds 80% expect to seek 1-3 acquisition targets or partnership opportunities over the next three years, as they look to expand their areas of expertise.

“Insurers are competing for market share in a slow-growth environment that is experiencing an influx of dynamic new insurtech players,” KPMG Head of Global Insurance Laura Hay said.

“Alliances and acquisitions become essential as insurers look to engage with customers in new and different ways and gain access to innovative operating capabilities and technology infrastructure to reshape their business and drive future growth.”

About 66% of survey respondents expect to conduct cross-border deals, while 32% are focusing on their home markets.

But more than 70% believe their deal-sourcing objectives are not highly aligned with their corporate strategy, and their capabilities for evaluating a target’s strategic fit are moderate to low.

“Insurers need to redefine deal success – from acquisition strategy to integration execution,” KPMG Global Head of Insurance Deal Advisory Ram Menon said.

“Transformation is not a ‘one-and-done’ event.”

North America, particularly the US, is expected to have the most insurance merger and acquisition activity in the next three years. Asia-Pacific is predicted to produce the most partnership opportunities, and Western Europe is likely to see relatively more divestments.