The impact of mergers and acquisitions within insurance

For a long time, mergers and acquisitions have allowed businesses within the banking and finance industry to enjoy a great deal of success. We’re now seeing an increasing amount of this activity taking place in the insurance sector. As a result, there’s a high demand for change and transformation professionals. As one of the most established industries within international business, numerous factors may be responsible for this spike in activity. We spoke to Hollie Crombie, Senior Candidate Consultant at Huxley, to find out more.
 

A rise in mergers and acquisitions within the insurance sector

 
The European Solvency II directive, which requires EU insurance companies to hold a certain amount of capital to reduce risk of insolvency, was implemented last year. Cooperating with this legislation has allowed many businesses to enjoy a significant surplus that they can then invest in mergers and acquisitions. Antonello Aquino, Associate Managing Director of Moody Investors Service, articulated the impact of Solvency II, “Over 40 per cent of chief financial officers surveyed are now looking for ways to deploy excess surplus, with M&A and share buybacks the main options available to them”.
 
According to KPMG, 84% of insurance firms plan to make at least one acquisition. In addition to this, a further 94% expect to make one divestiture, in turn leading to further mergers and acquisitions. We’re already seeing this happen on a large scale, as insurance firm Towergate merges with four firms.
 
With such a large increase of mergers and acquisitions on the horizon, the landscape of the insurance sector is beginning to change. As businesses prepare for re-structuring, there’s a significant demand for change professionals to work across various functions of organisations.
 

Partnering with insurtech companies

 
The decision of who to enter into partnership with is extremely important. With investment deals of over $2 billion in 2016, insurtech is revolutionising the sector. As more insurtech companies bring innovative solutions to the market, many large corporations are looking to share in the success of these companies. Research by Willis Towers indicates that over the next three years, 49% of global insurers expect to acquire new technologies through mergers and acquisitions.
 
Established firms are investing in the technological expertise offered by new insurtech companies. A partnership of a recognised and respected insurance company with a new, innovative start-up can bring mutual benefit. The older company can provide customers with a better user experience thanks to the access they now have to new technologies. In turn, the start-up can share the success of their partner’s reputation, not to mention their established client base.
 

The impact on recruitment

 
If mergers and acquisitions are to be successful, the transition process has to be smooth. As processes change and people get to grips with new systems, it’s essential that there’s as little disruption as possible for the overall business. As such, the various changes to the industry have created a large demand for change professionals.
 
Due to the diverse nature of different businesses and projects, the demand for change management professionals is extremely varied. Hollie explains, “It doesn’t make sense to hire everyone on a permanent basis because when projects are over there’ll be too many permanent staff.  But on the other hand, permanent staff will be needed to carry projects through to Business as Usual stage after changes have been implemented, so it doesn’t make sense to hire everyone as a contractor. Therefore, there’ll be a great deal of opportunities for a varied mix of candidates."
 
These ongoing sector changes have highlighted the demand for a range of IT professionals within insurance. Whether you’re a change management professional or are looking for a different type of role within the sector, you can trust our consultants will work closely with you to help you find the opportunity you’re looking for.
 
At Huxley, we’re passionate about acquiring quality candidates and merging them with outstanding companies. Take a look at our Job Search, and find a role that allows you to put your talent to use.

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