Insurance

Q1 of 2023 saw 34 deals in the Insurance sector, an increase from c.26 average deals executed in the past few quarters. Notable deals in Q1 2023 include:

• South Essex Insurance Brokers acquired by Lloyd & Whyte for £45m.
• Cavendish Online acquired by Scottish Widows (a subsidiary of Lloyds Group) for £12m.

The deal activity in this sector has been influenced by:

• Regulation – the FCA has been increasing regulatory standards, driving up compliance costs and incentivising consolidation.
• Managing General Agents (MGA) – private equity has been investing substantially in this area, often focusing on more specialised areas of the insurance market where returns can be higher.

Restructuring activity in this sector remains ‘moderate’ for the 4th consecutive quarter. Direct-to-consumer market remains intensely competitive and inflation is serving to increase the cost of resolving claims. An increasing number of firms are moving focus towards specialist areas, spurred on by the increasing complexity of cyber risks, geopolitical tensions, and climate change.