Private equity has consistently invested in the insurance sector, which has established itself as a key subsegment of financial services, particularly commercial lines. And it’s continuing to grow, partner Grier Tumas Dienstag and colleagues say. At the start of the third quarter 2024, the value of insurance deals surpassed that of 2022 and 2023 and occurred alongside an uptick in investments in financial technology and broader financial services.
Image description:
A single stacked bar chart, appearing above 3 smaller bar charts, shows the annual deal value (in billions of US dollars) of financial services private equity investments across 3 subsegments—insurance, other financial services, and financial technology and payments (including technology companies that operate in financial services, eg, payments or software)—from 2014 to 2024. In 2014, the deal values were $12 billion for insurance, $45 billion for other financial services, and $16 billion for financial technology and payments. By 2021, insurance increased to $45 billion, other financial services rose to $69 billion, and financial technology and payments dropped to $10 billion. As of July 2024, the projected deal values were $27 billion for insurance, $68 billion for other financial services, and $24 billion for financial technology and payments.
The smaller 3 graphs show, from left to right: the annual post-valuation median of insurance (in billions of dollars), the annual number of global insurance deals, and the annual number of global financial services deals. In each case, excluding the incomplete 2024 year, there has been a steady overall increase on average.
Note: Figures may not sum, because of rounding. Screening criteria include the following: deal dated from Jan 1, 2014; deal option search on a full transaction; completed, announced, or in-progress deal status; all buyout types; other private equity types (excluding private investment in public equity, general partner stakes); industry groups: insurance, other financial services (including commercial banks, capital markets and institutions, etc), and IT (where financial services is also categorized).
Footnote: Data for 2024 is as of July 31, 2024, including announced (in-progress) deals.
Source: McKinsey analysis of S&P Global Market Intelligence data, accessed Aug 13, 2024.
End of image description.
To read the article, see “Investing in insurance: The value imperative,” October 14, 2024.