M&A and Transaction Solutions Insurance Market Insights 2023 – 2024
Snapshot
- 2023 was marked by a tempered outlook on mergers and acquisitions activity, with caution over the global economy due to recession apprehensions and increasing interest rates.
- Mergermarket data revealed a 15% decline quarter to quarter in the first half of 2023, however, the last quarter of 2023 certainly saw a rebound.
- Our outlook for 2024 is that M&A activity will pick back up in 2024 and be a fruitful year for investors as there is still an abundance of dry powder for good quality assets and strong interest from overseas investors for Australia and New Zealand assets.
It is difficult to overlook the fact that the deal-making landscape in 2023 was challenging, particularly in contrast to previous years where the M&A market was buoyant and rebounding from the shackles of COVID-19. Given the backdrop of macroeconomic turbulence, market volatility, onerous financing conditions and increased regulatory scrutiny, transactions completing successfully seemed more arduous than before. The bargaining position between buyers and sellers prompted lengthier discussions on valuations and commercial points, leading to longer deal processes and heightened scrutiny by buyers on diligence.
While the M&A landscape in 2023 may not have been dominated by high-profile mega-deals as in previous years, it did showcase a more robust presence for small to mid-market transactions as companies pursued alternative strategic growth objectives.
We have also seen heightened consideration around due diligence scopes with clients seeking feedback from us and the insurers at an earlier stage of the process. We have assisted clients early in the diligence process to align the scopes as much as possible to the general expectations of the W&I insurers to optimise coverage and pinpoint any potential deficiencies. This ongoing collaboration has continued to promote a more effective and efficient approach to the underwriting process and ultimately better coverage outcomes.
Our outlook for 2024 is that M&A activity will pick back up in 2024 and be a fruitful year for investors as there is still an abundance of dry powder for good quality assets and strong interest from overseas investors for Australia and New Zealand assets.
For further insights on M&A and transaction solutions insurance market trends and 2024 outlook, download the full report.
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