Could the current soft market help spur on more merger and acquisitions by Bermuda companies?

The Bermuda Foundation for Insurance Studies (BFIS) will cohost a panel Thursday, July 17 along with Drinker Biddle & Reath LLP on new developments in the Insurance M&A industry.

Tom Dawson, partner at Drinker Biddle & Path, told the Bermuda Sun with “the increased merger and acquisition activity in the insurance and reinsurance, which is of great interest to Bermuda, we thought that this would be a topic that would appeal to a fairly broad spectrum of people in Bermuda.”

Mr Dawson said the soft market in the reinsurance and insurance industry is increasing the demand for M&A activity.

“One of the ways to grow is to acquire another company. If a company is having difficulty in maintaining its earnings, one way to exit the business is to sell the business.

“Companies may decided to combine to build better businesses.”

Joe Seiler is a partner and member of the firm’s Corporate & Securities Practice, and he said another growth area for M&A activity is in funds.

The pair said three areas for M&A trends are

1) Where companies wish to combine and grow;

2) Where owners of companies and /or operators no longer want to be in a particular business and use the M&A market to exit it; and

3) Where non-insurance purchasers that are looking to increase or assemble large blocks of assets under management. Mr Dawson said the third area is very attractive to private equity funds that are looking to buy annuity issuers.