Page 17 - Insurance Times JUNE 2022

International

News

M &A deal value in China broader economic outlook has become 39.5% of the gross written premiums
less conducive to deal making.” (GWP) in 2022 as an increasing num-
drops 12% QoQ despite
“Fuelled by rising geopolitical tensions ber of insurers are partnering with
witnessing 10 megadeals banks, says GlobalData. The leading
in the wake of the Russia-Ukraine con-
data and analytics company notes that
in Q1 2022 flict, worsening macro-economic out-
high levels of bank penetration, econo-
look, higher interest rates, and supply
The ongoing global geopolitical issues
mies of scale and the advantage of
chain disruptions have all led to damp-
and volatile market conditions con-
cross-selling insurance products to
ening investments activity, particularly
tinue to pose downside risk to the
their existing client base will continue
in M&A hubs in Asia-Pacific including
mergers and acquisitions (M&A) deal
to provide a competitive edge to
China, Japan, and South Korea. As
activity in China. As a result, despite
Spain’s bancassurance channel.
corporates are now more cautious
witnessing 10 megadeals (deal value
around deals, the M&A market is en- Swarup Kumar Sahoo, Senior Insurance
=$1bn) in Q1 2022, the country saw
tering into a more subdued phase.” Analyst at GlobalData, comments:
12% and 9% drop in deal value com-
“Despite losing market share in the life
pared to Q4 and Q1 of 2021, respec- The report also notes that out of 18
insurance and pension segment, the
tively, reveals GlobalData, a leading sectors, 10 sectors—Aerospace, De-
Bancassurance channel remains the
data and analytics company. fence, and Security (ADS), apparel,
leading distribution channel of the
automotive, banking & payments, con-
GlobalData’s latest report, ‘Mergers
Spanish insurance market, supported
and Acquisitions Deals by Top Themes sumer goods, healthcare, insurance,
by growth in the general insurance
and Industries in Q1 2022’, notes that mining, oil & gas, and travel & tour-
business.”
a total 390 M&A deals were an- ism have reported a quarter-on-quar-
nounced in China in Q1 2022 with a ter increase in deal value in China and The insurance sector is a highly profit-
combined transaction value of $31bn, the remaining saw a drop. In fact, one able business for banks, with more than
a 35% drop from the previous quarter of the top 10 megadeals was wit- 50% of a banks’ profits in 2020 coming
and 16% drop versus Q1 2021 in terms nessed in China - EQT to acquire Bar- from the insurance sector. GlobalData
of deal volume. ing Private Equity Asia for $7.5bn. found that of the 195 insurers operat-
ing in Spain, 34 are associated with
Snigdha Parida, Senior Analyst of The-
matic Research at GlobalData, com- Bancassurance remains major banks and these insurers regis-
tered higher profits in 2020 when com-
ments: “Globally, the market has weak-
the leading insurance dis-
pared to insurers that did not have any
ened in Q1 2022, lower than every
tribution channel in Spain bancassurance business.
quarter in 2021. This can be viewed as
a return to more ‘normal’ levels, as Bancassurance is the leading distribu- Sahoo continues: “Bancassurance is
the COVID-19-driven boost to deal tion channel in the Spanish insurance popular in Spain for purchasing life in-
making has largely dissipated and the industry and is expected to account for surance, particularly for investment-
The Insurance Times, June 2022 17