What We See Ahead for the Insurance Industry
Further consolidation will create opportunities for investors.
Monumental changes are taking place in the insurance industry, creating opportunities for winning firms and savvy investors alike. With the announcement on March 12 that Prudential plc (PUK) would purchase fellow life insurer American General (AGC), we thought it would be worthwhile to look at some of the trends that we believe will drive continued consolidation in the insurance industry. We'll also highlight some of the players on the merger and acquisition stage.
As the baby boomers reach retirement age, financial firms are fighting to capture a share of the growing fee-based asset-management market. And insurance companies aren't about to be left out of this lucrative business. When American International Group (AIG) bought SunAmerica in 1999, the world's largest insurance company by market capitalization added asset management to its line-up. Well-capitalized European banks and insurers have bellied up to the table as well, with Dutch insurer Aegon (AEG) buying Transamerica in 1999, and Swiss banks UBS (UBS) and Credit Suisse First Boston (CSGKY) picking up asset manager Paine Webber and broker Donaldson, Lufkin, & Jenrette, respectively.
Aaron Westrate does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.