EY: Value of UK insurance M&A deals reaches £900 million in first half of year, total increases

According to a new report from EY, the number of publicly announced M&A deals in the UK insurance industry rose from 54 in the first half of 2023 to 94 in the first half of 2024, while the total value of announced deals climbed from £400 million to £900 million.

This information is part of EY’s latest M&A analysis in the financial services sector, which found that UK banks, insurers and asset managers publicly announced 175 transactions between January and July this year, the highest half-year volume in more than a decade.

The total value of announced transactions in the UK financial services sector also increased in the first half of the year compared to the same period last year, from £5 billion in the first half of 2023 to £6.9 billion in the first half of 2024.

The number of publicly announced UK banking deals reportedly fell from 39 in the first half of 2023 to 34 in the first half of 2024, while the total value of deals announced increased from £3.2 billion in the first half of 2023 to £5.5 billion in the first half of 2024.

At the same time, the number of publicly announced transactions in the UK wealth and asset management industry fell from 66 in the first half of 2023 to 47 in the first half of 2024, and the total value of publicly announced transactions more than halved from £1.5 billion in the first half of 2023 to £500 million in the first half of 2024.

According to the EY report, the number of non-UK companies acquiring UK targets increased from 28 in the first half of 2023 to 34 in the first half of 2024, although the total value of announced deals fell from £3.1 billion in the first half of 2023 to £1 billion in the first half of 2024.

“The number of UK firms acquiring overseas targets increased from 34 in the first half of 2023 to 48 in the first half of 2024, and the total value of announced deals increased from £200 million in the first half of 2023 to £1.3 billion in the first half of 2024,” EY added.

Tom Groom, EY UK Financial Services Strategy and Transactions Leader, commented: “Signs of economic recovery in the UK have boosted market confidence and the UK financial services industry recorded its highest half-year volume of M&A activity in over a decade.

“While it is important to track short-term increases in transaction volume and value, looking at activity over the long term is critical to understanding the bigger picture.

“Although transaction volumes have increased so far this year – albeit at lower levels on average – ongoing macroeconomic uncertainty, geopolitical tensions and a change of government could create further headwinds.

“However, assuming the economic outlook continues to improve, we expect M&A activity – both in volume and value – to continue to increase throughout 2024 as companies accelerate their plans to innovate and grow in the strengthening environment.”