Top financial executives at large life insurance companies think mergers and acquisitions in the industry will grow significantly over the next 12 months.
In an informal survey of chief financial officers by the Tillinghast unit of Towers Perrin Inc., Stamford, Conn., 57% said it is possible or highly likely their company will acquire another company in the next 12 months, and 77% said it is possible or highly likely their companies will acquire a block of business from another company.
Life insurance companies are eyeing acquisitions primarily as a way to achieve profitable growth and to make more effective use of available capital, Tillinghast found.
CFOs were generally satisfied with recent M&A experiences, with 72% stating that all or most of their M&A transactions over the past 3 to 5 years met or exceeded their expectations. This is up from 43% who felt the same way in its 2003 CFO survey, Tillinghast says.