Private equity investors have scaled back their investment activity in the insurance industry in the last two years.
According to the PitchBook Platform, PE investors have backed 194 insurance companies based in the U.S. or Canada since the beginning of 2010. The combined deal count for 2012 and 2013 to date is just one more than all of 2011's output of 69 deals. Economic and regulatory uncertainty has been widely blamed, as regulators have applied new scrutiny on the entire financial services industry in recent years.
Add-on acquisitions made up the bulk of the activity in the timeframe, as PE firms look to build insurance platforms by acquiring established insurance companies, taking advantage of fragmentation in the industry.