We also see PE activity across many other areas of insurance, including participating in the extensive consolidation and reshaping of distribution businesses, which are themselves fundamentally affected by technology changes.
“While Insurtech is largely perceived as a space for venture capital rather than PE, generalizations are risky,” says David Lambert, EY Global Insurance Transactions Leader. “PE investment will be a key part of the monetization of new technologies.”
PE houses are looking to invest into current IT service providers, with a view to helping them to significantly enhance their propositions, and will also be looking to acquire new disruptive businesses as they start to prove their ability to scale and generate cash flows.
Tax reform as a catalyst for M&A
US reform is a great example of how tax law changes can stimulate (or nullify) the deal market. The US rule changes are wide ranging. Changes such as the reduction in headline rate will make the US a more attractive place to invest.