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According to Fitch Ratings, a softening reinsurance marketplace might well drive the return of merger and acquisition (M&A) activity as organic opportunities diminish and players with accumulated capital mull takeovers of companies less successful in the hard market.
In a recent report, Fitch noted that in 2025, there was no major and very limited reinsurance market consolidation activity, as trends such as favourable pricing and beneficial terms and conditions kept focus on organic growth and away from M&A activity.
However, Fitch expects that with organic opportunities subsiding in the softening market, companies with accumulated capital from sizeable profits will consider acquiring insurers and reinsurers that were less successful in taking advantage of the hard market.
There were a few companies that announced ownership and strategic changes in 2025. One recent strategic transaction is Markel’s sale of the renewal rights for its reinsurance business to Nationwide, representing about $1.2 billion of gross premiums written.
As noted by Fitch, the transaction is part of Markel’s strategy to focus on its core specialty insurance business, as the reinsurance operations were sub-scale and underperforming.
In 2025, IPO activity resumed with Aspen returning to a public company in May after deciding not to proceed with an IPO in 2024. The firm went private in a 2019 deal with Apollo Global Management, Inc., which still owns approximately 82% of Aspen.
Fitch stated: “The company demonstrated notable improvement following portfolio optimisation efforts to improve profitability and reduce volatility. The improved environment could also present opportunities for newer companies, such as Convex Group Limited and Vantage Group Holdings Ltd., to go public.”
Recently, there has been only one non-life reinsurance startup, which is Mereo Insurance Limited, as sufficient industry capital diminishes the need for new entrants, explains Fitch.
Industry veteran Brian Duperreault launched Mereo just after the January 2025 renewals to write property, casualty and specialty reinsurance, raising a modest $650 million from several investors. It also launched an ILS fund with $250 to $300 million of capital.
The other M&A in 2025 were ownership changes at Enstar Group Limited and SiriusPoint, where Enstar was acquired in July for $5.1 billion by Sixth Street Partners LLC, with Liberty Strategic Capital, J.C. Flowers & Co. LLC and other institutional investors also participating in the transaction. This means that Enstar is no longer a public company.
Fitch viewed the transaction as neutral to Enstar’s ratings, as the acquisition did not change Enstar’s business profile, financial profile or operating strategy, although the new parent enhances Enstar’s investment capabilities.
SiriusPoint repurchased all remaining common shares and warrants held by CM Bermuda Limited for $733 million in February 2025, funded with existing capital.
It will be interesting to see how reinsurance sector M&A develops as the market softens somewhat from the highs of 2023. Although, returns are still attractive for many, as numerous CEOs stressed throughout Q2 earnings season. With returns favourable for many reinsurers and global capital levels hitting new highs, as reported by broking groups, organic growth certainly isn’t off the table for many, but there’s every chance companies turn to M&A to drive growth in the future.
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