North American insurance underwriter deal activity fell dramatically during the first quarter of 2024 as inflationary pressures contributed to a difficult M&A atmosphere.

Both deal frequency and aggregate transaction value lagged during the quarter, declining nearly 40% in terms of the number of transactions and by around 91% in aggregate value from the prior quarter.

The decline mimicked first-quarter M&A activity across all sectors amid a broader dealmaking downturn in the region linked to high interest rates.

With just 14 deals, the first quarter of 2024 tied with the second quarter of 2020 for the fewest number of deals over the last four years.

With an aggregate value of $500 million, the first quarter of 2024 was also among the lowest quarters since 2020, behind all but the fourth quarter of 2022 and second quarter of 2020, which logged aggregate values of $220 million and $340 million, respectively.

– In Play Today highlights potential mergers and acquisitions in the global insurance sector, while M&A Replay presents a summary of recently announced deals. – Discover the latest trends in insurance M&A across Asia-Pacific and the US broker market. – Access deep dives into insurance transactions across the globe via our Deal Profile feature.

Probitas tops list

The largest deal of the quarter was Aviva PLC's acquisition of Probitas Holdings (Bermuda) Ltd., valued at $305.8 million, followed by Medical Mutual of Ohio's acquisition of Paramount Care Inc., valued at $125 million.

Aviva's purchase of Bermuda-based Probitas was driven in part by a desire to enter the UK's Lloyd's of London insurance market, CFO Charlotte Jones said during a March shareholder call.

"Entering the Lloyd's market supports our ambition for capital-light growth and significantly expands the market opportunities in our global corporate and specialty business," Jones said.

Other deals included FG Group Holdings' $32.4 million merger with FG Financial Group Inc., after which the former changed its name to Fundamental Global Inc., and Hagerty Inc.'s $18.4 million acquisition of Consolidated National Insurance Co.

Elite Insurance Group LLC was one of the smaller deals, acquired for $12.2 million by an undisclosed buyer. Announced on Jan. 31, the deal closed quickly and was completed on March 7.