M&A deals among MENA insurers expected to pick up

Insurance companies are competing to remain relevant
M&A deals among MENA insurers expected to pick up

On the back of new trends in the industry, consolidation and M&A deals among insurers in the Middle East region are expected to pick up, according to a new PwC report.

The study reveals that insurance companies in the region are also anticipated to launch new features and products as they compete to remain relevant in a “fast-changing and uncertain” environment.

According to the consulting firm‘s findings, insurers have undergone a “massive transformation” and have faced more difficulties as a result of the COVID-19 pandemic, including an increase in life and health insurance claims.

Read more: MENA M&A transactions hit $69.7 bn in 9 months

Automation and AI have altered how insurers interact with their clients as ESG and sustainability are becoming more and more important.

As regulators continue to tighten their supervision regime, particularly around capitalization/solvency, we expect to see more consolidation and M&A activity in the regional insurance industry due to the adoption of ESG standards and rapid digitization, said PwC.

M&A transactions have already increased in MENA. According to Clyde & Co, at least 16 M&A deals in the region were recorded in the first half of the year, up from the five agreements reached during the same time period in 2021.

The region’s M&A activity and consolidation are being fueled by a number of factors. A Deloitte report claims that regulators are considering raising the minimum capital requirements for businesses in the sector, while insurers are also being pushed to diversify and grow.