North American insurance underwriter deal value rose during the third quarter even as the frequency of transactions dipped slightly.
Aggregate transaction value increased by about 37% to $7.01 billion quarter over quarter, an even more notable increase from the first quarter's recent low of approximately $520 million.
The increase in the aggregate value of transactions involving insurance underwriters also mirrored the M&A trend in the broader US and Canada markets.
In contrast, deal frequency involving insurance carriers was down slightly, with 22 transactions in the third quarter, down from 23 in the prior quarter.
– In Play Today highlights potential mergers and acquisitions in the global insurance sector, while M&A Replay presents a summary of recently announced deals.
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The largest North American underwriter deal of the third quarter was the purchase of Enstar Group Ltd. by an investor group comprised of Sixth Street Partners LLC, Liberty 77 Capital LP, J.C. Flowers & Co. LLC and other investors for $4.6 billion.
Enstar is a market leader in buying property and casualty portfolios and companies that are closed to new business, a sector that generalist investors find even tougher to understand than live insurance and reinsurance. Many feel that this made Enstar, now the last remaining listed legacy property and casualty company, ill-suited to the public markets.
"Enstar being taken private makes a ton of sense," said Victor Nelligan, a reinsurance broker at Aon PLC specializing in legacy transactions, in an interview following the deal announcement. "The public markets have never understood the business model."
The second-largest underwriter deal of the quarter was StanCorp Financial Group Inc.'s purchase of The Allstate Corp.'s employer voluntary benefits business for a tidy $2 billion.
The move by Allstate to sell off its smaller accident and health-focused units is motivated by rising costs in the business line as the company refocuses on its core property and casualty operations, according to comments from leadership following the deal announcement.
