New Study Reveals 68% of Global Carrier Mergers Generate Value for Shareholders

Insights from ACORD's M&A Study on Carriers

ACORD, the internationally recognized standards organization for the insurance sector, has recently published a revealing update on the state of carrier mergers and acquisitions (M&A). The study covers nearly 500 transactions that were finalized between July 2023 and December 2025 across 84 different countries. Notably, 68% of these mergers generated real value, while 32% resulted in value destruction, indicating a significant trend in the ever-evolving landscape of insurance mergers.

Key Findings About Mergers and Acquisitions

The report not only evaluates transaction performance but also sheds light on the shifting motivations behind these deals compared to previous years. Different strategies for M&A have emerged, reflecting new market dynamics:

1. Scale and Scope: Traditionally the most favored rationale, this approach focuses on maximizing resource access and amortizing fixed costs through size. However, its significance has decreased, falling to third place as a motivator, with a concerning average loss of -13.6% in total shareholder return (TSR).

2. Diversification: What used to be the least adopted strategy has transformed into the most commonly employed rationale, now representing 41% of transactions. Its focus on acquiring new revenue streams has yielded positive outcomes, showing a substantial average return of +13.7%.

3. Capability Acquisition: While this approach has a smaller representation at only 6% of deals, it has proven to deliver the highest returns, averaging an impressive +27.7%.

Dave Sterner, Senior Vice President of Research & Development at ACORD, articulated the struggles associated with achieving the anticipated benefits from scale and scope-related strategies. He stated, "Increasing scale tends to amplify pre-existing challenges rather than transform them, leading to a frequent overestimation of projected synergies."

The Current M&A Landscape

The number of M&A transactions in the insurance industry experienced a decline, dropping from a peak of 321 in 2016 to approximately 163 by 2025. This reduction reflects mounting pressures arising from increased capital costs associated with rising interest rates, ongoing inflation, geopolitical instabilities, and more rigorous regulatory scrutiny. Nonetheless, the nature of these deals is evolving towards larger, more complex transactions. The average deal size surged from $455 million between 2015 and 2024 to an astonishing $1.1 billion in 2025.

This shift towards fewer but larger deals means that effective execution is becoming increasingly paramount. Organizations must now focus on protecting core operations and translating deal intentions into practical value initiatives. Establishing clear decision-making rights and executing integration in a structured manner are crucial for long-term success.

Conclusion

The findings from ACORD's recent study not only provide critical insights into the current M&A landscape for global carriers but also challenge traditional views on value creation in the insurance industry. Stakeholders must adapt their strategies to meet the evolving realities of the market and recognize the importance of disciplined execution in capitalizing on M&A opportunities. The full report is available for both ACORD members and non-members on their website.

For a detailed examination of the study, visitors can refer to ACORD’s research page.

As the insurance sector continues to face new challenges and opportunities, understanding these dynamics will be vital for stakeholders aiming to navigate the complexities of mergers and acquisitions successfully.