Insurance mergers and acquisitions jumped in the Asia Pacific region last year while global activity overall stabilised, a report from Clyde & Co says. 

Global transactions increased to 211 from 204 in the previous 12 months, when M&A activity reached a 16-year low, as Asia Pacific deals rose to 58 from 39. 

In the Americas transactions declined to 77 from 92, UK and Europe deals rose to 57 from 56 and the Middle East and Africa recorded a decline to 15 from 17. 

Australia based partner Yvonne Lam says Asia Pacific was the standout, with deal activity rebounding strongly and several of the largest transactions taking place in markets such as Japan.  

“In Australia, the insurance sector is benefiting from the stronger growth in the broader APAC region,” she said. 

“We are seeing increased levels of strategic insurance M&A activity as new industry players enter the market in specialty areas and global groups look to restructure for streamlining of their regional operations.” 

Globally, 15 deals with a value of at least $US1 billion ($1.4 billion) were completed. A majority of seven “mega deals” exceeding $US5 billion ($7 billion) took place in the Asia Pacific region. 

Clyde & Co Partner Eva-Maria Barbosa says the past year has seen selective and steady activity on the carrier side and continued momentum and a “real depth of interest” in the intermediary space. 

“Significant deal flow stems from intermediaries, brokers and [managing general agency] platforms, and many of these businesses are backed by private equity and are actively seeking expansion opportunities,” she said. 

The Asia Pacific region is expected to remain a key driver of global deal activity this year given strong capital positions and a continued push for international expansion, particularly among Japanese insurers. 

But Clyde & Co says geopolitical instability remains a risk to the global dealmaking trajectory, as it could disrupt sector confidence, and the prospect of rising interest rates could increase the cost of capital and dampen appetite.