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July 21, 2017 at 02:21 PM
Sean Dargan, a Wells Fargo & Co. securities analyst, says European insurers are willing to give buyers reasonable prices for blocks of U.S. annuity business.
The insurers have run-off blocks that could be “transacted at below book value,” Dargan writes in a preview of the upcoming earning season. “We expect to see more deals in particular within the fixed annuity space going forward.”
In another commentary, on speculation about possible deals involving Generali and Manulife Financial Corp., Dargan writes that “the ‘Great Restructuring’ of the global life insurance industry continues apace.”
(Related: 5 Ways an AXA U.S. Spinoff Could Affect You)
The number of mergers and acquisitions in the life sector was relatively low in 2016 and earlier this year, but “deal activity seems to have picked up,” Dargan writes.
Dargan cites recent deal announcements involving Reinsurance Group of America Inc., Wilton Re and Fidelity & Guaranty Life as evidence of sellers’ interest in closing sales.
RGA and Wilton Re appear to have picked up blocks of business for prices below book value, or estimated value based on financial statement figures, Dargan writes.
