November 22nd, 2011

Third Quarter 2011: Update on Property/Casualty M&A Activity

Posted at 1:00 AM ET

ezbiansky_chris_gcciChris Ezbiansky, Head of M&A Advisory - Americas and Jeffrey Hathaway, GC Securities*
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During the third quarter 2011, financial market volatility and a difficult operating environment continued to stifle, but not completely hinder, merger and acquisition (M&A) activity for property/casualty (P&C) risk-bearing entities. During the quarter, the most significant activity was in the form of deals announced, as opposed to transactions closing.

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Notable events during the quarter included the announcement of Nationwide’s intention to acquire Harleysville Group (announced value: USD815.8 million), Wright Risk Management’s intention to acquire Fidelity National Financial’s flood business (announced value: USD197.5 million, closed November 10, 2011), Tokio Marine’s intention to acquire First Insurance Company of Hawaii (announced value: USD167.8 million) and ACE’s announcement of its intention to acquire Penn Millers (announced value: USD105.0 million).

The total transaction value of all deals announced in the third quarter but not yet closed would take this year’s total amount from USD5.1 billion to USD6.3 billion upon completion.

fig1-us-bermuda-activity-11q3

Looking ahead to the fourth quarter, GC Securities expects deal activity to remain muted and continues to see a focus on transactions involving specialty carriers, as well as mutual insurers, as noted in our property/casualty insurance mergers and acquisitions report for the first six months 2011.

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* Securities or investments, as applicable, are offered in the United States through GC Securities, a division of MMC Securities Corp., a US registered broker-dealer and member FINRA/SIPC. Main Office: 1166 Avenue of the Americas, New York, NY 10036. Phone: (212) 345-5000. Securities or investments, as applicable, are offered in the European Union by GC Securities, a division of MMC Securities (Europe) Ltd., which is authorized and regulated by the Financial Services Authority. Reinsurance products are placed through qualified affiliates of Guy Carpenter & Company, LLC. MMC Securities Corp., MMC Securities (Europe) Ltd. and Guy Carpenter & Company, LLC are affiliates owned by Marsh & McLennan Companies. This communication is not intended as an offer to sell or a solicitation of any offer to buy any security, financial instrument, reinsurance or insurance product. Messrs. Ezbiansky and Hathaway are registered representatives of MMC Securities Corp.

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