The Asia-Pacific insurance industry's M&A activity slightly dipped in the third quarter, with only 16 deals announced compared to 19 in the prior quarter, according to an analysis by S&P Global Market Intelligence.

Australia's insurance M&A landscape was noticeably subdued following several quarters of active dealmaking. The two deals announced during the period were PSC Insurance Group Ltd.'s acquisition of Eastern Prudential Insurance Group Pty. Ltd. and Acacia Insurance & Risk Services Pty. Ltd.'s sale to Multi Secure Insurance Solutions Pty. Ltd.

India and Japan emerged as the most active areas, each recording three deals in the third quarter.

Insurance broker deals bolstered M&A activity in India. The largest deal announced was Paramount Health Services & Insurance TPA Pvt. Ltd.'s pending sale to Medi Assist Insurance TPA Pvt. Ltd. for about $37.2 million, followed by Sampada Business Solutions Pvt. Ltd.'s agreement to acquire the remaining 1.43% stake in India Insure Risk Management & Insurance Broking Services Pvt. Ltd. that it does not currently own.

All three insurance deals announced in Japan also involved insurance brokers. The biggest of these was ZIGExN Co. Ltd.'s acquisition of a 66% stake in Hoken Mammoth Co. Ltd. for about $4.5 million. A noteworthy M&A development was UK-based Howden Group Holdings Ltd.'s acquisition of Foresight Holdings Co. Ltd., which marked its entry into the Japanese retail broking and captive consulting and management markets.

The two transactions announced in South Korea, Woori Financial Group Inc.'s bid to acquire Tong Yang Life Insurance Co. Ltd. and Construction Guarantee Cooperative's minority stake sale, ranked among the largest insurance M&As in the Asia-Pacific region by deal value in the third 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. – Access deep dives into insurance transactions across the globe via our Deal Profile feature. – Use the screener to access M&A data on the S&P Capital IQ Pro platform.

Largest deals face regulatory hurdles

Regulators are closely watching the top two largest insurance deals announced in Asia-Pacific during the quarter.

The Singaporean government pushed back against Germany-based Allianz SE's planned acquisition of at least 51% of Income Insurance Ltd. for about $1.65 billion. Minister for Culture, Community and Youth and Second Minister for Law Edwin Tong announced that the government has decided "it would not be in the public interest for the transaction, in its current form, to proceed," although it is open to alternative arrangements.

The regulatory hurdle arose after officials evaluated a plan for Income Insurance to return S$1.85 billion in cash to its shareholders — including Allianz — within three years of the transaction. This projection raised concerns about Income Insurance's capacity to offer affordable policies with a diminished capital. Allianz said it would assess the situation.

However, experts told Market Intelligence that the deal could become less attractive for the German insurer depending on the fate of the S$2 billion surplus that the government allowed Income Insurance to keep when it converted to a corporate entity from a cooperative.

Woori Financial Group's planned acquisition of Tong Yang and ABL Life Insurance Co. Ltd. also drew regulatory concerns regarding the associated risks. Financial Supervisory Service Governor Lee Bok-hyun said there was concern about whether Woori Financial has fully accounted for the heightened risk of acquiring life insurers in its overall risk management, The Korea Times reported. Market observers believe Woori Financial's healthy capital and financial conditions may not be enough to mitigate the legal risks associated to the sale process, according to the report.