European Insurers fall into each other's arms - by David Nicholson
A flurry of merger and acquisition activity has taken hold in the insurance industry, with targets large and small coming under scrutiny from rivals. What are the roots of this buzz and what could it mean for consumers?
Last month the European Union announced radical new laws, known as Solvency II, to determine how much capital insurers have to hold to match the risks they face. For the large companies, this is likely to mean they can free up billions of euros in capital, since they are highly diversified and have consequently lower risk. They could, then, spend this extra cash on acquisitions.Mid-sized companies, however, may need to merge with one another to comply with Solvency II.
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