Claims, Capacity And COVID: Welcome To M&A Insurance In 2020

The mergers & acquisitions market is challenging for insurers due to an increase in claims activity and an oversupply in capacity.

Throw a pandemic into the mix, and you get emerging risks, squeamish deal participants and plenty of uncertainty — yet deals are getting signed at a record pace. Welcome to M&A in 2020.

To help explain the current climate, Liberty Global Transaction Solutions examined the company’s past 10 years of claims notifications. The final few months are perhaps the most interesting, as COVID-19 changed everything.

The pandemic halted many deals in Q2 due to travel restrictions and work shutdowns. Economic uncertainty led private equity firms to step back from buying new assets.

Then the floodgates opened, leading to the largest quarter ever for Liberty GTS in number of deals and premium volume, said Rowan Bamford, president of Liberty GTS.