The aggregate value of insurance underwriter M&A in North America increased in 2023 in contrast to a wider decline in overall dealmaking.
The level of deal activity involving insurers in 2023 decreased 2%: 96 transactions compared to the 98 recorded in 2022, according to an S&P Global Market Intelligence analysis. However, the aggregate transaction value hit $16.23 billion, a 16.8% increase from $13.89 billion in 2022.
This contrasted with North American M&A activity across all industries, in which the number of transactions dropped 23.7% and total transaction value declined 15.3% as high interest rates weakened companies' appetite for M&A.
Largest insurer deals
The largest deal in the past year was Brookfield Reinsurance Ltd.'s planned acquisition of American Equity Investment Life Holding Co. for $3.59 billion.
Two other life and health deals — KKR & Co. Inc.'s $2.7 billion stake acquisition of Global Atlantic Financial Group Ltd. and S.USA Life Insurance Co. Inc.'s $1.91 billion pending purchase of National Western Life Group Inc. — were among the five largest carrier deals announced in 2023.
The second-largest carrier acquisition and the largest managed care deal announced in 2023, Elevance Health Inc.'s planned $3.5 billion purchase of Blue Cross and Blue Shield of Louisiana, has hit several snags.
Blue Cross and Blue Shield of Louisiana said Feb. 14 that it had paused the transaction and was canceling policyholder meetings, adding that its members needed more time to "understand the benefits" of the deal.
This was the second time the deal has stalled. The previous pause was in September 2023 amid regulatory concerns; it was resumed in December.
Appetites change
When compared to the two years prior, life and health deals declined notably in 2023, falling from 39 transactions in 2021 to 19 deals in 2023. Life and health deals also declined from 2022, when 27 deals were announced.
While life and health and property and casualty M&A transactions declined in total from 2022 to 2023, the number of managed care deals nearly doubled, growing to 11 in 2023 from six in 2022. Reinsurance deals grew to eight from five during the same period.
