In a white paper published by (Re)in Asia, Justin Ward, Head of Capital Advisory for Asia Pacific, emphasizes that insurers pursuing M&A growth strategies must ensure alignment with their core strategic objectives to drive sustainable success.
In this section of the white paper, Justin described how strategy is increasingly important to align transactions.
“While valuations of the core franchise are important, acquirers will look to the strategically optionality along with the synergies—revenue and expense—that they can bring to the target, coupled with the financing arrangements. These all play an important role in driving valuations,” Justin said.
In this portion of the paper, Justin addressed how some private equity funds are sensing growing opportunities for M&A deals.
“Where private markets are becoming increasingly involved in the region, it is as a catalyst for consolidation, a catalyst to build distribution channels, and a catalyst to build a regional platform,” he explained.
In the final section, Justin explained how future opportunities will favor specialist players with the expertise, resources and technology to unlock operational efficiencies or distribution synergies.
“When pursuing an M&A growth strategy, insurers need to make sure it is consistent with their core strategic objectives—scale, geographic/product diversification, distribution expansion—and be clear on what is driving underlying growth in the target insurer,” he continued.