The insurance sector is an important pillar of the Swiss financial services market. Whilst there are still more than 200 supervised insurance companies in the country, the concentration in the sub-sectors is quite high, in particular in the life insurance space, where the largest five players represent more than 80% of the booked gross premiums. The whole market is stagnant and competition is steadily increasing. Growing regulation and solvency requirements further increase the insurers cost base. On the other hand, new competition from insurtechs and potential new entrants from other industries as well as the (current) negative interest environment put additional pressure on income and premiums. We currently see the following main M&A trends:
- Attempt to diversify income streams by building up – organically and by means of acquisitions - asset management and other fee-earning business models, i.e. outsourcing and other services.
- Flirting with and occasional investments into insurtechs and/or other fintech companies to enhance own competence in digital business models.
- Review of international footprint and portfolios of larger players.
- Slow consolidation in the health insurance market.