KPMG Insurance M&A Monthly


June 2010	SEARCH ANALYSIS ARCHIVE FEEDBACK

KPMG ANALYSIS

Can Insurers Survive Reform Changes to the Individual Health Insurance Market?

This article is focused exclusively on the individual health insurance market and the reform stimulated change that is expected.

Property/Casualty Actuarial Insights - Worker's Compensation - Review of California Results

The current economic conditions are creating uncertainty in the worker's compensation line of business and may be changing some fundamentals of the line across the country.

Center of Attention! - Focusing on New Strategies

As markets continue to recover from the financial crisis, it is imperative that customer centricity is at the core of new and developing strategies.

Feature of the Month

After Profitable 2009, Reinsurers Face Pricing Pressure from Primary Insurers

A softening casualty market, strong company earnings, and a quiet catastrophe season resulted in the reinsurance industry enjoying, in 2009, one of its most profitable underwriting years in nearly a decade.

NEWS FROM REUTERS

Insurers Well Positioned to Face Hurricane Season

U.S. property and casualty insurers have sufficient capitalization to withstand a potentially strong hurricane season, despite a slight drop in pricing.

Obama Warns Health Insurers not to Hike Rates

The President's warning followed a Kaiser Family Foundation report that showed health insurers are raising prices by an average of 20 percent for working-age adults who buy their own policies.

NY Fed Failed to Exhaust AIG Rescue Options

In response to the findings, the Fed and Treasury have argued that after the failure of Lehman Brothers, they had little choice but to rescue AIG with taxpayer funds or the ensuing panic would have gutted the global financial system.

European Insurance Risks Shifting, No Big Rise

According to the Committee, for the next twelve months some risks are expected to increase, especially regulatory and reporting changes as well as tax and pension reforms, claims inflation and reserve risk.

AIG's $2.2 Billion Taiwan Unit Sale Deadline Extended

Despite booming business ties, many in Taiwan are suspicious of China's intentions towards the island, while concerns have also been raised over what might happen to Nan Shan's more than 4 million policyholders.

Other News

Insurance Trade Associations Mostly Relieved by Financial Reform Bill Deal

In the wake of the deal, insurance trade associations evinced greater confidence that the final shape of reform will leave the insurance industry relatively unscathed.

Brokers are Running to Stand Still

[LEXISNEXIS]Despite a persistent soft market, M&A remains an option to deliver the growth that the broking sector is missing.

Flood Insurance Program Back in Business Until September 30

INSURANCE JOURNALThe U.S. Senate approved a temporary reauthorization of the federal flood insurance program until September 30, retroactive to June 1.

INDUSTRY M&A ACTIVITY

HM Life Insurance Company agreed to acquire the employer stop loss line of business of Mutual of Omaha. Terms were not disclosed. (6/17)

Arthur J. Gallagher & Company acquired retail insurance broker Bowen, Miclette, Britt & Merry of Arkansas, Inc. and Ohio-based Joseph James & Associates. Terms were not disclosed. (6/17 and 6/2)

Chicago-based insurer Old Republic International Corporation agreed to acquire Pennsylvania-based PMA Capital Corporation for $228 million. (6/10)

Altegrity, an international screening and security solutions company, agreed to acquire risk consultancy company Kroll from Marsh & McLennan Companies for $1.1 billion. (6/7)

Insurance broker Hub International acquired the assets of employee benefits brokerage firm IRUS Corporation and retail brokerage firm Risk Transfer Insurance Alliance. Terms were not disclosed. (6/7 and 6/1)

Source: Company press releases.

MERGER STATISTICS

Although the number of total property and casualty deals has remained relatively constant since the second quarter of 2009, the size of the deals has declined significantly.

View data detail.

KPMG’S TRANSACTION SERVICES PRACTICE

KPMG’s Transaction Services and M&A Tax practices comprise over 600 partners and professionals in the United States, solely devoted to providing acquisition and divestiture support and advisory services to strategic and financial investors.

For more information about KPMG's transaction services capabilities in the insurance sector please contact: Michael Ryan, Partner at 214 840 2262 (maryan@kpmg.com) or Ram Menon, Managing Director at 212 954 3448 (rammenon@kpmg.com).

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