Insurance mergers and acquisitions saw a decline in May

Mergers and acquisitions in the UK general insurance market saw a significant decline at the end of May, with only seven deals announced during the month, marking a 30% decrease compared to the previous year. Data released by consulting firm MarshBerry revealed that not only were there fewer transactions, but those that did occur in 2025 were relatively small in scale.

In fact, more than two-thirds (69%) of the deals in 2025 involved businesses valued at less than £5m, a notable increase from the average of 59% based on over 1,000 deals since 2016. John Nisbet, the managing director at MarshBerry, highlighted the shift in M&A activity, noting that April saw a surge in new deals due to the end of the tax year and a rise in Business Asset Disposal Relief rates. However, this momentum was not sustained, as May returned to the low levels of announced transactions witnessed earlier in the year.

The overall number of deals in 2025 has remained below average, with a total of 42 deals year-to-date, compared to 60 at the same time last year, representing a 30% decrease. It is unlikely that the industry will reach the 150+ level of sector deals seen in 2023 and 2024 this year.

The decline in M&A activity can be attributed to various factors, including economic uncertainties, regulatory changes, and market dynamics. The ongoing impact of the global pandemic has also influenced the insurance sector, leading to a more cautious approach to deal-making. As businesses navigate these challenges, strategic decisions regarding mergers and acquisitions become more critical, impacting the overall landscape of the industry.

Despite the current slowdown in M&A activity, opportunities for growth and expansion still exist within the general insurance market. Companies may need to reassess their strategies, explore new partnerships, and adapt to evolving market trends to stay competitive and resilient in a changing environment. By focusing on innovation, operational efficiency, and risk management, insurers can position themselves for long-term success and sustainable growth.

It is essential for industry players to closely monitor market developments, regulatory changes, and consumer trends to make informed decisions regarding mergers and acquisitions. Collaboration, flexibility, and strategic planning will be key components in navigating the shifting landscape of the insurance sector. As the industry continues to evolve, proactive measures and a forward-thinking mindset will be crucial in seizing opportunities and overcoming challenges in the dynamic marketplace.