Insurance M&A accelerates, driven by tech

- Global insurance M&A deal value rebounded to $4.7 trillion in 2025, a 43% increase from $3.3 trillion in 2024. This surge was characterized by a higher number of large transactions, with 60 deals valued at $10 billion or more. - Private equity is playing an increasingly significant role, with PE firms and sovereign wealth funds actively acquiring insurance companies. Private equity investments in the insurtech sector alone accounted for $17.8 billion, representing 54% of the total capital deployed. - Technology is a primary catalyst for these deals, with acquirers targeting firms that have superior digital infrastructures for analytics, AI-driven underwriting, claims automation, and digital distribution. Investment in data analytics for the insurance sector saw a significant increase, reaching $5.7 billion in the first nine months of 2024, compared to $1.8 billion for all of 2023. - In addition to buying technology outright, insurers are forming B2B partnerships with insurtech firms to integrate innovative technologies, access new distribution channels, and improve processes like claims and fraud detection. These collaborations are shifting from transactional relationships to long-term strategic alliances. - A notable trend is the acquisition of smaller, more technologically advanced firms by larger brokers and carriers to gain access to robust systems and cleaner reporting structures. AI is being leveraged to streamline the M&A process itself, from identifying targets and conducting due diligence to facilitating post-merger integration. - The average insurtech deal size has increased to $18.46 million, the highest since the third quarter of 2022, indicating a market shift toward larger, more impactful investments. - Portfolio optimization is another key driver, with insurers divesting non-core assets and carving out certain books of business to focus on strategic growth areas. This has led to an increase in non-life run-off transactions, with 42 such deals announced in 2025. - Geographically, while US-led deal volume has declined as large brokers digest recent acquisitions, European and Asian carriers have increased their M&A activity to manage costs, meet new regulatory demands, and expand into fast-growing markets.