Mergers and acquisitions could pick up quickly among life insurers

Feb 01, 2011

Deals could come thick and fast in 2011

In 2010, the mergers and acquisitions headlines in the life insurance market were dominated by two blockbuster deals, according to the Wall Street Journal, but 2011 could see more general activity.

While AIG's sale of American Life Insurance to MetLife, as well as its deal with Prudential for several smaller subsidiaries, were the only major moves of their type last year, they could provide clues to the type of activity possible in the 2011 market, the Journal said.

Two smaller deals have already occurred, according to the newspaper, and both appear to have been motivated by the seller's desire to shed vulnerable capital exposure and re-focus on core offerings. The Journal suggests this type of move could become more common, as long-term strategies are becoming increasingly important in the industry. The paper also adds that tightening regulations in Europe could affect U.S. firms doing business there.

For the consumer, then, an increased focus on core life insurance products is likely to be a good thing, spurring competition and innovation and, consequently, offering a better bang for one's buck.

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