European view

Growing market

A pick-up in the European economy combined with attractive growth opportunities in segments such as healthcare, group insurance and accidental death insurance, is leading to continued strong prospects across the continent.

For instance, in France total contributions collected by insurers is forecast to increase from €209.6bn in 2016 to €211.6bn in 2017 with insurers particularly benefiting from growth in these new segments.

The Spanish market is also benefitting from renewed growth in its own economy. Insurance companies raised their revenues by 12% to a record €63.8bn at the end of 2016, with non-life insurance increasing by 4.5% to €32.7bn and life insurance by 22% to €31.1bn. As such the split between non-life and life insurance is now almost equal.

Spanish insurance market growth

The non-life sector has also been performing particularly strongly in Portugal where the insurance market has seen a major reorganisation following the restructuring of the Portuguese banks. Although the insurance market as a whole dropped by 14% in 2016 to €10.8bn, this masked wide variations. While life insurance fell by 23% to nearly €6.6bn, the non-life sector increased by 5% to c. €4.2bn in premiums.

However, the UK remains by far the largest insurance market in Europe (and the third largest in the world), managing investments of £1.8tn1 (c. €2tn) and accounting for nearly a quarter of all EU premium income.

That said, whether it emerges as Europe’s key InsurTech cluster remains to be seen. Across the continent venture and private equity backers are beginning to grasp the potential for value generation within the space, and although entry multiples are high compared to typical private equity targets – and the scale of innovation required is vast – exits already seen in the space indicate insurance-related technology companies could be the next big play in the wider FinTech space.

Wider M&A activity in the Irish insurance market is also being driven by Brexit as UK-based insurance companies look to establish European bases. IDA Ireland, the body responsible for attracting foreign direct investment, has said it will continue to promote the country as an insurance hub.

1: Association of British Insurers

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