By Lewis Nibbelin, Analysis Author, Triple-I
Offers exceeding $1 billion drove insurance coverage {industry} mergers and acquisitions in 2025, aligning with a surge of synthetic intelligence-based megadeals within the broader M&A market, in accordance with PwC’s U.S. Offers 2026 Outlook. Whereas complete M&A deal worth rose to $1.6 trillion by way of November 30 – the second-highest worth ever recorded – the insurance coverage sector remained constant, although ongoing financial uncertainty may problem this stability.
Upward developments emerge
Owing 93 % of its worth to megadeals, the insurance coverage {industry}’s deal quantity totaled $31.8 billion throughout the second half of 2025, in comparison with $30 billion throughout the earlier six months. Heading into 2026, PwC initiatives that each improved loss ratios and rising strain on property and casualty charges will facilitate additional offers, because the {industry}’s efficiency can appeal to traders whereas additionally main carriers to hunt development by way of extra acquisitions.
“In coming months, anticipate rate of interest developments and an industry-wide seek for development to strongly affect insurance coverage offers exercise,” stated Mark Friedman, PwC U.S. insurance coverage offers chief.
Conversely, complete M&A market worth elevated by 45 % from 2024, with greater than 20 % of its 74 offers valued at $5 billion or extra referring to A.I. Such market exercise suggests “A.I. is considerably accelerating software program and client items improvement” by boosting portfolio methods, operational efficiencies, and different positive factors throughout numerous industries, the report notes.
Ramzi Ramsey, a senior managing director at Blackstone Progress, emphasised the growing position of A.I. as a core driver of M&A development, arguing that “firms who’re considered to learn from AI tailwinds are seeing outsized multiples and deal actions,” whereas “firms the place AI is considered to be a detractor, or if the AI impression is cloudy, might don’t have any bid.”
Center-market lags
Although nonetheless the third-largest up to now decade, general M&A market quantity rose by solely 2 % from 2024, with middle-market offers between $100 million to $1 billion slumping to their lowest quantity since a minimum of 2013. Tariff coverage shifts largely fueled these figures, reflecting larger warning amongst dealmakers – significantly smaller companies – as supply-chain dangers grew to become extra unpredictable.
Whereas sudden coverage adjustments and up to date commerce disputes may persist into the brand new yr, PwC’s report discovered that “rate of interest cuts this yr have already helped mid-tier corporates, and additional Federal Reserve Board motion in 2026 may go a great distance in relieving strain on them,” particularly as present tariff insurance policies proceed to stabilize.
Together with declining rates of interest, “merchandise that may stand up to declining client efficiency and confidence” ought to assist the insurance coverage sector stay energetic in 2026, the report provides, pointing to A.I. investments as important to sustaining “stable floor” within the M&A market.
Be taught Extra:
Inflation, substitute prices, local weather losses form householders’ insurance coverage choices
Regardless of Headwinds, P/C Insurance coverage Business Maintains Course in 2025
JIF 2025: U.S. Coverage Modifications and Uncertainty Imperil Insurance coverage Affordability