Insurers across the Asia-Pacific (APAC) region are bracing for a significant rise in mergers and acquisitions (M&A) over the next three years, driven by strategic imperatives rather than opportunistic expansion. According to a study by Clearwater Analytics, 96% of insurance asset management executives predict a surge in domestic M&A, with 15% expecting a dramatic increase.
The research, which surveyed senior executives from life and health insurers, general insurers, and third-party investment firms in Hong Kong, Singapore, and Australia, highlights a need for rapid growth as the primary driver of M&A activity. Firms are looking to expand quickly to achieve competitive scale, diversify risk, and reduce reliance on a single product or market.
Potential synergies from mergers or acquisitions were identified as the third most important reason for increased M&A activity, followed by the improved financial capacity of the combined firm. The findings suggest that operational efficiency and scale are becoming essential for survival in the market.
Shane Akeroyd, Chief Strategy Officer and President of Asia Pacific at Clearwater Analytics, stated, “The APAC insurance market is experiencing a fundamental shift where scale and operational capabilities are becoming competitive necessities.” He emphasised the importance for insurance executives to evaluate their operational capabilities, infrastructure, and scale to compete effectively in a complex market.
The study underscores the strategic positioning of M&A as firms aim to consolidate rather than eliminate competition, marking a pivotal shift in the APAC insurance landscape.
