Insurance M&A: Resilience, Digital Disruption, & Value Creation, in association with West Monroe, features insights from 250 private equity and insurance company executives on trends and the outlook for insurance M&A.

Resilience in the face of macro volatility

Insurance M&A remained resilient in 2023, with only a 2.3% decline in deal volume from its 2021 peak—despite an 18.4% drop in the broader M&A market over the same period. The U.S. saw fewer but larger deals—nearly doubling in aggregate value to $44.8 billion—and deal volume in Europe hit a record high, though total value fell sharply.

Tech risks and rewards

Dealmakers point to digital transformation as the principal driver of M&A in the near term, cited by 19% of respondents as the top deal motivator. But creating value through digital transformation requires significant investments in technology and talent which, if not executed well, risks canceling out other synergies.

Value creation

Enhancing technology/insurtech capabilities is the most important step toward creating value. But dealmakers are aware that integrating IT systems and internal processes is the single greatest hurdle to post-deal value creation (30%).

Digital priorities

When it comes to bolstering technology tools, respondents believe the most important capabilities to prioritize over the next 12 to 24 months are artificial intelligence (25%), cybersecurity (26%), and data analytics (26%). Plus, 30% of respondents believe data analysis will be the aspect of deal-making most disrupted by the evolution of AI.

Due diligence in transition

Technology & data has had a profound impact on M&A due diligence processes. Where certain parts of the process (e.g., data collection & summarization) have become easier, evaluating nascent AI capabilities has proved challenging.

The report is also available to download at westmonroe.com/perspectives/signature-research/insurance-m-and-a