sector of insurance brokerage proves himself attractive and scores +20% approximately by number M&A operations In 2022 compared to last year. Research shows that “broker tech:Between extraordinary operations and digitalization”, produced by EY I Italian Insurtech Association (IIA) Which included prime brokers active in the national and international context, whose market coverage was equal to 70% of total revenues. The analysis provides an overview of M&A operations, the level of maturity in adopting new technologies and the main characteristics of the competitive landscape.
M&A operations are a priority
Despite economic uncertainty, the operation of M&A remains a priority strategy. EY-IIA survey shows that in the last 24 months I’81% of players Responders have initiated action Exceptional, mainly in terms of acquisitions (62%). Despite rising interest rates and macroeconomic uncertainty, the insurance sector has maintained high levels of growth Attraction For M&A operations in both Europe and Italy, In 2022, the number of concluded transactions increased: 20 transactions (compared to 16 in 2021) for a total investment volume of approximately EUR 2 billion. Although the value is decreasing compared to last year (due to the higher cost of funding, due to the increase in interest rates, which discouraged players from undertaking larger operations), inorganic growth represents an effective option for competitive strength. And the volume of M&A operations supported.
For this reason, although increasing uncertainty makes consolidation in Italy less convenient in 2023, the survey highlights significant activation expected in the near future. 85% of players who have made one or more acquisitions In recent months it has planned to create another 12 in the next 12 months to further strengthen its presence in the region or in a specific sector or risk segment through the acquisition of new skills and distribution channels.
Regarding completed acquisitions, interviewees say that 69% operational Its purpose is to consider the work done in the last 24 months Another broker, to some extent a insurancetech or one technology company, The main objectives guiding the acquisition relate to expansion of its market share (62%), internalization of technical tools and skills (54%) and acquisition of new customer targets (both 54%).
Investment in new technologies is also increasing
The ongoing consolidation process in the market has made this even more evident Brokers need to digitalize and integrate new technologies To differentiate yourself and continue to operate profitably in a highly competitive context: 62% of them interviewed declared that he has Invested in new technologies In the last 24 months. These investments are mainly related to Generic AI related applications (62%) E RPA solutions (42%) and were created with the main purpose of making existing processes more efficient (for the entire sample) and improving relationships with customers (62%).
in 62% of cases One of the investments made was Positive impact on margins, Whereas according to 31% of the people interviewed, it is still too early to make an objective assessment. Among the digital tools most used by brokers in Italy, comparison and quotation tools rank first (81%), followed by claims management software and home insurance portals (71%) and data analysis tools (67%).
Competitiveness and market trends
Regarding the competitive landscape, Most respondents (71%) see no threat In InsurTech, those who enter the insurance brokerage market with a vision “digital native”, This happens because large brokers refer to a different market from the consumer market in which consultation and customization still represent the real factor.