Insurance mergers and acquisitions (M&A) slumped to historic lows in the first half of 2025, as geopolitical tensions, macroeconomic instability, and uncertainty surrounding US policy under President Donald Trump’s administration created a challenging environment for dealmaking.
Despite the slow start, there is cautious optimism for an uptick in activity in the second half of 2025. According to one industry analyst, the second half of 2025 may test whether pent-up demand can finally break through the uncertainty barrier.
“We’re seeing more conversations now than three or four months ago,” said Peter Hodgins, partner and global head of corporate insurance at Clyde & Co. “If nothing changes dramatically in the macro environment, I think we’ll see more deals get done in Q3 and Q4.”
According to new data from Clyde & Co, only 95 insurance M&A deals were completed in H1 2025, down from 106 in the same period in 2024 and significantly below the 10-year H1 average of 192 deals.
The slowdown reflects growing caution among carriers, who have increasingly opted to conserve capital, engage in share buybacks, and focus on smaller bolt-on acquisitions rather than large-scale strategic plays.
Speaking to Insurance Business, Hodgins pointed to a “raft of uncertainty” continuing to restrain carrier appetite for transactions, as global insurers adopt a wait-and-see approach.
“The overriding theme for the year so far has been restraint,” Hodgins said. “Carriers are holding fire on deals because of the combined impact of the US election, the Trump administration’s economic and foreign policies, and a broader sense of political instability.”
Dealmakers, Hodgins added, “want to see how the economy and policy environment develop before making long-term strategic commitments.”
This geopolitical fog has exacerbated existing macroeconomic challenges, including high inflation, rising interest rates, and volatile capital markets, all of which have made valuations harder to agree on.
According to Hodgins, some deals have stalled simply because the numbers didn’t work.
“We’ve seen a disconnect between buyer expectations and seller pricing, particularly in regions like Southeast Asia and the Middle East,” he said.
Sellers in fragmented or subscale markets, such as parts of Southeast Asia, are often pricing themselves on the value of their licenses or perceived market access, rather than the actual fundamentals of the business. “That’s a difficult sell for buyers looking for ROI and operational synergies,” Hodgins said.
Despite this dynamic, Hodgins expects a resurgence in M&A activity in the latter half of the year.
“There’s pent-up demand. People are actively looking and preparing, even if they haven’t yet pulled the trigger,” he said. “As policy directions become clearer, the pressure to deliver growth will push carriers into action.”
While large-scale, cross-border deals were rare, some notable transactions were completed in H1.
Sentry Insurance’s $1.7-billion acquisition of The General from American Family Insurance and Markel’s purchase of UK-based marine MGA MECO exemplify the kind of selective and strategic plays that are still taking place.
A recurring theme across these deals is the growing interest in managing general agents (MGAs).
“MGAs are a cost-effective way to access new markets,” Hodgins said. “We’re seeing both carriers and private equity firms build portfolios of MGAs to gain distribution and underwriting capabilities in new geographies.”
Looking ahead, Hodgins said, carriers are expected to continue shifting their focus toward higher-growth regions, particularly Southeast Asia, the Middle East, and parts of Africa.
“These are markets where we see real opportunity, both because of demographics and because of evolving regulatory regimes that support insurance growth,” he said.
In the Gulf region, for example, health insurance and reinsurance sectors are attracting attention from global players, while regulatory developments in Africa are paving the way for international expansion.
For 2026, Hodgins anticipates a continuation of strategic bolt-on acquisitions and an increased appetite for international expansion.
“There’s always demand for well-managed, data-rich businesses," he said. "Growth-focused carriers will keep looking toward emerging markets, and we may see more opportunistic plays—especially in regions affected by recent catastrophic events.”
