RJ and Makay

The insurance sector is expected to have another awkward year in deal-making. During the financial crisis, the sector had a significant drop in the number of mergers and acquisitions, and is now under pressure to show growth.

During a panel discussion at the SNL Insurance M&A Symposium last Tuesday, bankers said they thought large strategic insurance mergers may be one-off events in 2011, if any happens at all, and a surge of deals is unlikely. In the life insurance sector, any deals that take place will be attributed to companies trying to refurbish capital to improve return on equity, save costs, focus on core operations and remove themselves from business activities in which they don’t perform well.  M&A in property & casualty will be more normalized, according to bankers, but it will be tough to find any cost savings on that side of the business.