Concentration in reinsurance

The poor growth perspective of premiums, coupled with the low credit cost are additional reasons which account for the continuation of the merger-acquisition phenomenon that has overwhelmed the market in recent months. The big entry of Japan and China in the market of mergers and acquisitions is worth noting.

The firm grip of the major actors on the reinsurance market is getting confirmed year after year. By the end of 2015, 49% of global market is controlled by five reinsurers, a rate that was confined to 17% in 1980.

Still in 2015, the top ten global reinsurers account for 67% of the market whereas in 1980 this percentage was limited to just 22%, a 300% increase in a little more than 30 years.

Source: SCOR

Concentration in reinsurance: Major acquisitions achieved from Januaury 2015 to June 2016

Date	Purchaser	Country	Target company	Country	Transaction amount
January 2015	Catlin	Bermuda	XL	Ireland	4.1 billion USD
May 2015	Arch	Bermuda	Gulf Re	United Arab Emirates	1.83 billion USD acquisition of 50%
June 2015	Tokio Marine	Japan	HCC Insurance	United States	7.5 billion USD
July 2015	China Minsheng Investment	China	Sirius International	Bermuda	2.2 billion USD
July 2015	Meiji Yasuda Life	Japan	StanCorp Financial	United States	5 billion USD
August 2015	Exor	Italy	Partner Re	Bermuda	6.9 billion USD
August 2015	Sumitomo Life	Japan	Symetra Financial Corporation	United States	3.8 billion USD
September 2015	Mitsui Sumitomo	Japan	Amlin	United Kingdom	5.3 billion USD
August 2016	Arch Capital	Bermuda	United Guaranty	United States	3.4 billion USD
October 2016	Sompo Japan	Japon	Endurance Speciality	United States	6.3 billion USD

Sources: AM Best data and research

Concentration in reinsurance: Major acquisitions achieved in Africa from Januaury 2015 to June 2016

Date	Puchaser	Country	Target company	Country	Transaction amount
02/ 2015	Old Mutual	South Africa	UAP	Kenya	256 million USD Acquisition of 60,7%
03/2015	Fairfax Financial Holdings	Canada	Africa Re	Nigéria	61 million USD Acquisition of 7.15%
03/2015	Axa Group	France	Africa Re	Nigeria	61 million USD Acquisition of 7.15%
05/2015	International Finance Corporation	United States	PTA Reinsurance (Zep-Re)	Kenya	20 million USD
09/2015	Saham Finances	Morocco	Continental Re	Nigeria	Acquisition of 53.6%
02/2016	Capital Alliance Private Equity	Morocco	Continental Re	Nigeria	Saham Finances reduces its participation in C-Re, the main shareholder of Continental Re
June 2016	Kenya Re	Kenya	PTA Reinsurance (Zep-Re)	Kenya	20 millions USD
07/2016	Deutsche Investitions und Entwicklungsgesellschaft	Germany	PTA Reinsurance (Zep-Re)	Kenya	14 million USD Increase of shareholding in Zep Re to 14.93%

Sources: AM Best data and research

Concentration in Reinsurance brokerage market

Concentration does not target only companies, but also reinsurance brokerage where a trend of a bigger scale is now playing out.

The first three brokers alone account for 80% of the market. Competition, among brokers is relentlessly fierce. It is so strong that turnover is declining. Mergers and acquisitions among brokerage companies make it possible, hence, to obtain market share gains hardly achievable otherwise.

Gross revenues of reinsurance brokerage

in millions USD Source: www.statista.com