The charts illustrate that while the specialty and reinsurance markets appear to bear out the anti-correlation thesis, other factors have also influenced activity.
As expected, U.S. specialty insurer-M&A activity increased in the soft markets of the late 1990s, deal volumes were lower in the hard markets of the early 2000s and activity increased as the markets softened in the mid to late 2000s. However, the upward trend was disturbed in 2009 by the financial crisis and since then the activity has remained at lower levels despite the subsequent improvement in macro-economic conditions and continuation of soft markets.
Reinsurance market M&A activity is more difficult to interpret given the smaller number of transactions. However, it is notable that since 2006, M&A numbers have trended upwards as premium rates have decreased, and this shift would be more exaggerated when considered on the basis of deal value.