Sumitomo Life/Singlife tops 2023 APAC insurance M&A chart; deal volume drops YOY

Deals in the life and health space dominated Asia's insurance M&A scene in 2023, while overall deal volume decreased compared with the previous year, according to an S&P Global Market Intelligence analysis.

The largest deal was announced late in the year, with Sumitomo Life Insurance Co. poised to take full ownership of Singapore Life Holdings Pte. Ltd. Deal volume across most of Asia was down from 2022 — 92 transactions as opposed to 120 — with only India notching an increase year over year.

“Insurers and insurance asset managers strongly indicated an expectation that a bottleneck of M&A deals in this region could be pushed through this year, and [the Singlife deal] is perhaps an early sign that they were correct,” Atul Mehta, head of business in Asia Pacific at Clearwater Analytics, said in an email to Market Intelligence.

“Something that constantly crops up in conversations that we have with insurers that have designs to be acquired in the medium-term is the necessity of having an operational 'clean bill of health.' It is very important when it comes to desirability to potential acquirers, as the onboarding of a firm's assets can be incredibly laborious and a major source of additional cost if their systems are stuck in the age before cloud,” Mehta added.

Top of the charts

Sumitomo Life is set to finally acquire all of Singlife after announcing deals in September and December 2023 with estimated values of $660.8 million and $1.21 billion, respectively. Sumitomo Life is purchasing Aviva PLC’s stake in the Singapore insurer via the September deal and will purchase the shares beneficially owned by TPG Inc. in the December transaction. These two purchases will turn the Singapore insurer into a wholly owned subsidiary of Sumitomo Life.

The second largest M&A deal in Asia for the year was an all-India affair, with conglomerate Hinduja Group Ltd. acquiring Reliance Capital Ltd. for about $1.18 billion.

European insurers are also betting big on India. The British United Provident Association Ltd. is upping its stake in Niva Bupa Health Insurance Co. Ltd. at a cost of $324.8 million while Zurich Insurance Group AG is acquiring a majority stake in Kotak Mahindra General Insurance Co. Ltd. for $293.3 million.

Deal countdown

Australia and New Zealand recorded 33 deals in 2023, down from 43 in the prior year and 49 in 2021, while the 2023 deal count for South East Asia reached 20, down from 30 and 22 in 2022 and 2021, respectively.

There were 16 M&A deals in India in 2023, rising from nine and 15 in 2022 and 2021, respectively, while the latest deal count for Japan of 10 is down from 13 in 2022.

Mainland China had six deals in 2023 and 2022, down from 13 in 2021.