Mergers and acquisitions in the insurance industry slowed during 2023 and 2024. The market volatility that caused that slowdown won't necessarily prevent a rebound in insurance M&A this year, according to Marc Voses, a partner with Clyde & Co.
M&A among insurance carriers hit a 16-year-low in 2024, according to Clyde & Co.'s latest annual

Toward the end of 2024, M&A among insurance brokerages increased. That increase was expected to continue in 2025 in the U.S. but market uncertainty, volatility and macroeconomic issues prevented it, according to Voses, who specializes in transactional matters in the insurance industry. That volatility is expected to continue as the
"The market will become more accustomed to the volatility, and that will not stop parties within the insurance industry from making determinations on whether or not to engage in M&A activity," Voses said. "Deals are consistently being looked at, and even more deals are being looked at presently because of a readjustment in valuations with respect to businesses."
Interest rates, human capital and technology are also key factors to watch for their effect on M&A in insurance, according to Voses. A market correction or recession would drive down interest rates, and lower interest rates can fuel mergers and acquisitions, through greater availability of capital and impact on companies' valuations.
Competition within the insurance industry to hire qualified employees, in an industry built on relationships, Voses observed, could drive mergers in some cases, and block them in others. Technology, particularly AI, supporting the creation of more new insurance products, can increase companies' profits, and also therefore affect their interest in M&A, Voses added.
Insurtechs looking to be acquired must develop their platforms, not just simply label their product as insurtech, Voses stated. "Insurance companies may be less willing to invest in an MGA or startup insurer that does not have either a track record of onboarding and retaining customers, or delivering an insurance product that attracts new customers," he said.
Overall, Voses sees positive signs for the prospect of M&A in insurance. "The U.S. is a really attractive market for investors, irrespective of what's going on with respect to tariffs," he said. "The dollar is strong. It will remain strong. We're seeing a lot of private equity outside of the U.S., as well as sovereign wealth funds that want to get into the U.S. insurance market. Those premium dollars are very lucrative, and they do provide a great means for those outside the U.S. to get involved in the U.S. business markets across a very varied base of policy holders, from manufacturing to retail to technology to healthcare."