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.
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.
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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