KPMG Insurance M&A Monthly


January 2010	SEARCH ANALYSIS ARCHIVE FEEDBACK

KPMG ANALYSIS

Life Actuarial Insights - The Future of Financial Performance Management

KPMG's Life Actuarial practice conducted a survey to find out what measures are currently being used or considered by life insurance companies in the U.S. and what challenges they are facing.

Health Actuarial Insights - Uncertain Ground: The Future of Medicare Advantage

The amount of information available on Medicare Advantage is extensive and still evolving. This issue of Health Actuarial Insights provides an overview of the information available.

Feature of the Month

U.S. Democrats Vow to Move Ahead on Healthcare

Democrats have scrambled over the past week to come up with a new strategy to pass the healthcare overhaul, which was nearing final passage before it was derailed by the election.

NEWS FROM REUTERS

Insurers Face Pricing Quandary

The combination of falling insurance prices and weak investment returns have left property/casualty carriers exposed, with little financial buffer, to the risk of potential underwriting losses.

Reinsurance Prices Fall in January Renewals

Global catastrophe reinsurance prices were weaker due to the heavy competition, excess supply and the absence of catastrophe losses.

Insurers Seek Tax, Profit Changes in U.S. Health Bill

With as much as $225 billion in fees and taxes on the line, and numerous restrictions on profit and cost allocations, insurance carriers are pressing lawmakers to change the proposed bill.

Other News

Hales & Company Announces 2009 Insurance Brokerage M&A Review

BUSINESS WIREAlthough insurance brokerage M&A activity has been soft for the past year, the financial advisor feels that all fundamentals are currently aligned to jump start merger and acquisition activity.

Fitch: Outlook Negative for Life Insurers

INSURANCE NEWSNETThe rating outlook for the U.S. life insurance sector will remain negative based on a combination of economic and operating pressures unlikely to abate in 2010.

After Weathering Financial Storm, Industry Stability Continues to Benefit Consumers

INSURANCE NEWSNETThe property/casualty insurance industry continues to focus on its core business of transferring risk and paying claims amid the challenges of the ongoing economic downturn.

INDUSTRY M&A ACTIVITY

Kingsway Financial Services has entered into an agreement to sell its subsidiary Jevco Insurance Company to The Westaim Corporation in a deal valued at approximately $249 million ($263 million CAD). (1/25)

Chartis, AIG's non-life insurance business, has agreed to invest $147 million (13.5 billion yen) for majority control of Japan's Fuji Fire and Marine Insurance. (1/21)

Hannover Insurance Group acquired Benchmark Professional Insurance Services, an insurance provider for design professionals (1/21). In a separate transaction, Hannover Insurance Group agreed to acquire Virginia-based specialty insurer, Campania Group. Terms were not disclosed in either transaction. (1/18)

Berkshire Hathaway acquired the U.S. life insurance business of Zurich-based Swiss Re for $1.3 billion. In a separate transaction, Berkshire Hathaway acquired a 3% stake in German-based Munich Re for approximately $1.0 billion. (1/18)

The Phoenix Companies has entered into an agreement to sell its subsidiary PFG Holdings, a provider of private placement insurance services, to Tiptree Financial Partners. Terms were not disclosed. (1/6)

Insurance broker Hub International acquired insurance broker Ogilvy Hill Insurance as well as the commercial lines and health and life books of business of California-based Wescom Insurance Services. Terms were not disclosed. (1/6)

Brown & Brown acquired the assets of Florida-based Alamo Insurance Group. Terms were not disclosed. (1/5)

Source: Company press releases.

MERGER STATISTICS

Insurance deal activity in 2009 was impacted by capital constraints caused by the overall economic downturn. The deal volume for 2009 was one-half of 2008 levels, and deal value in 2009 was one-quarter of the prior year.

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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