Insurers’ M&A in the United States during the 1990-2022 period: Is the Fed monetary policy a causal factor

Georges Dionne (), Akouété Fenou () and Mohamed Mnasri ()
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Akouété Fenou: HEC Montreal, Canada Research Chair in Risk Management
Mohamed Mnasri: HEC Montreal, Canada Research Chair in Risk Management

No 24-2, Working Papers from HEC Montreal, Canada Research Chair in Risk Management

Abstract: We investigate the causes of the gap in mergers and acquisitions (M&A) between life and nonlife insurers in the US from 1990 to 2022. Our DID analysis indicates a parallel trend between M&As in the life insurance and nonlife insurance sectors from 1990 to 2012, and a significant difference after 2012. There was a shock in the life insurance market that resulted in a reduction in M&As after 2012. Variable annuity sales in the life insurance sector declined after 2012. We find evidence that low interest rates observed during the implementation of the quantitative easing policy of the Fed from 2008 to 2012 caused the difference in M&As in the life sector after 2012.

Keywords: Merger and acquisition; life insurance; nonlife insurance; US insurance market; DID methodology; quantitative easing policy; life insurance annuity; variable annuity (search for similar items in EconPapers)
JEL-codes: C21 D40 D80 G14 G22 G34 (search for similar items in EconPapers)
Pages: 76 pages
Date: 2024-02-21, Revised 2024-07-16
New Economics Papers: this item is included in nep-cba, nep-com and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:ris:crcrmw:2024_002

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