Mergers and Acquisitions in Insurance: Navigating Challenges and Opportunities

Mergers and acquisitions (M&A) remain a critical strategy for insurers seeking to expand, diversify, and enhance their operational scale within the industry. Praveen Pachaury, Senior Vice President at Xceedance, highlights that technology integration can be a significant barrier in the insurance M&A process. Challenges such as incompatible core systems, fragmented data, and resistance to cultural change often hinder post-merger success. Pachaury advises a proactive approach involving early technology engagement, comprehensive regulatory compliance reviews, and effective change management strategies to ensure a smoother integration and maximize value from these deals.

Despite a decline in the number of completed M&A transactions over the past year, the financial value of these deals has increased. According to PwC, the first half of 2025 saw 209 disclosed deals in the global insurance market, amounting to $30 billion, compared to 297 deals valued at $20 billion in the previous six months. This trend of fewer but more substantial transactions is expected to continue into 2026. A recent PwC report covering the latter half of 2025 noted an additional 207 insurance deals totaling $31.8 billion, reflecting ongoing significant transformations.

Acquisitions allow insurers to better compete with tech-savvy competitors and address rising underwriting and claims costs. However, operational complexities following an acquisition often pose major challenges. Even after closing a deal, integrating technological systems, consolidating data streams, and aligning operational models with regulatory compliance requirements are often cited as key hurdles to fully realizing the benefits of M&A transactions.