Meritz Financial's insurance subsidiary takeover Asia's largest in H2'22

South Korean financial conglomerate Meritz Financial Group Inc.'s takeover of subsidiary Meritz Fire & Marine Insurance Co. Ltd. was the largest deal of the second half of 2022 in the Asia-Pacific region.

Under the deal, one Meritz Fire common share will be exchanged for every 1.2657378 Meritz Financial common shares. The stock swap was completed by Feb. 1, according to the latest filing, dated Feb. 6. The listing of new Meritz Financial Group shares and the delisting of old Meritz Fire & Marine Insurance shares took place Feb. 21.

Dai-ichi Life International Holdings LLC's acquisition of New Zealand's Partners Life Ltd. was the second-largest deal over the period, according to an S&P Global Market Intelligence analysis.

S&P Global Ratings expects the New Zealand life insurance segment's profitability to improve in 2023 in line with the sector's strong historical average, thanks to low exposure to group schemes, disability and income protection products. Nominal premium growth of 3% to 4% in over the next two years is expected, supported by age-related premiums and term and trauma products, but this should be offset by some policy lapses post-COVID-19.

Taekwang Industrial Co. Ltd. boosting its stake in Heungkuk Fire & Marine Insurance Co. Ltd. was also among the largest deals, the analysis found.

The underwriting performance of South Korean property and casualty insurers will remain stable over the next two years, the rating agency said. This as premium growth of about 4% to 5% for the sector will likely be underpinned by steady domestic economic growth and hikes in premium rates for medical indemnity policies. Tightened control on claims and gradually improving investment yields are also expected to support profitability, despite an increase in auto loss ratios and higher prospective reinsurance costs.

* Access an insurance underwriters M&A deal book and heat map. * Read our weekly compilation of Asia-Pacific insurance stories.

Deal count drops slightly

The number of deals in the Asia-Pacific region nudged down to 115 in 2022 from 120 a year earlier.

The deal count for Australia and New Zealand was six lower at 42, while China's total deal count fell to seven from 13. The number of deals in Southeast Asia increased to 27, from 23 a year earlier.