Success of Mergers and Acquisitions in the Insurance Industry: What Can We Learn From Previous Empirical Research?

Inhaltsverzeichnis (Table of Contents)

• Introduction
• History of the Consolidation Process and Relevance of the Topic
• Problem Statement and Research Gaps
• Research Objectives and Development of Research Questions
• Organization of the Study
• Theoretical and Methodological Background
• Overview
• Theoretical Foundations
• Growth Options of Insurance Companies
• Definition of the Term Mergers and Acquisitions
• Categorization of M&A
• Phases of the M&A Process
• Overview of M&A Waves
• Methodological Foundations
• Definition of M&A Success
• Traditional Approaches to Testing the Success of M&A
• Financial Statement-Based Approach
• Basic Procedure
• Strengths and Weaknesses of the Measure
• Capital Market-Based Approach
• Basic Procedure
• Strengths and Weaknesses of the Measure
• Retention/Divestment Approach
• Basic Procedure
• Strengths and Weaknesses of the Measure
• Interview and Survey Approach
• Basic Procedure
• Strengths and Weaknesses of the Measure
• Concluding Evaluation of the Approaches
• Literature Review: Prior Research on the Success of Insurance M&A and its Determinants
• Overview
• Overview of Recent Studies
• Selection of Prior Research
• Literature Review Method
• Development of Research Clusters
• Review of Individual Studies on the Overall Success of Insurance M&A by Cluster
• Accounting Ratio Analysis
• Efficiency Analysis
• Linkage of Event and Efficiency Analysis
• Event Analysis
• Summary
• Review and Results of Prior Capital Market Research on the Overall Success of Insurance M&A
• Acquiring Firm Stockholder Returns
• Short-Term Results
• Medium- and Long-Term Results
• Target Firm Stockholder Returns
• Short-Term Results
• Medium- and Long-Term Results
• Total Stockholder Returns of Combined Firms
• Short-Term Results
• Medium- and Long-Term Results
• Comparison of Short-Term and Medium and Long-Term Results
• Summary of the Evidence on the Overall Success of Insurance M&A

Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)

This dissertation aims to systematically analyze the success of mergers and acquisitions (M&A) in the insurance industry. By examining previous empirical research, the study seeks to identify the factors that influence the success of M&A and provide insights for future transactions.

• Examining the history of consolidation in the insurance industry and its current relevance
• Analyzing the different theoretical and methodological approaches to define and measure M&A success
• Reviewing prior research on the success of insurance M&A and its determinants, focusing on both accounting-based and capital market-based studies
• Identifying key factors influencing the success of M&A in the insurance industry
• Drawing conclusions and recommendations based on the analysis of prior research

Zusammenfassung der Kapitel (Chapter Summaries)

The first chapter provides an introduction to the dissertation, outlining the research question, objectives, and organization of the study. Chapter two lays the theoretical and methodological foundations for the analysis, defining M&A and exploring various approaches to measure its success. Chapter three presents a comprehensive literature review, examining previous research on the success of insurance M&A and its determinants. This review includes both accounting-based and capital market-based studies, highlighting the findings and limitations of previous research. The dissertation concludes by discussing the implications of the literature review for future research and practice.

Schlüsselwörter (Keywords)

The study focuses on the success of mergers and acquisitions (M&A) in the insurance industry, examining factors that influence the success of such transactions. Key terms include M&A, insurance industry, consolidation, theoretical and methodological approaches to M&A success, accounting ratio analysis, efficiency analysis, event analysis, capital market-based research, acquiring firm stockholder returns, target firm stockholder returns, and total stockholder returns. The dissertation aims to contribute to the understanding of M&A success in the insurance industry by analyzing previous empirical research and identifying key success factors.

Frequently Asked Questions

Do mergers and acquisitions in the insurance industry actually create value?

Overall, the literature review suggests that insurance M&A tend to create value for shareholders of target firms and for the combined entity, though effects for acquiring firms vary by region.

How do M&A wealth effects differ between US and European insurers?

While US acquirers often benefit, European insurance acquirers frequently experience negative short-term and long-term wealth effects according to traditional capital market studies.

What is the "stochastic dominance" (SD) approach used in this thesis?

SD is a methodological approach used to evaluate M&A success by comparing the return distributions of acquiring firm portfolios with benchmark portfolios to test reliability and validity.

What are the common methods for measuring M&A success?

The study outlines several approaches: financial statement-based (accounting ratios), capital market-based (event studies), retention/divestment analysis, and interview/survey methods.

Does the negative market reaction for European insurers persist over time?

The thesis finds that while there is a negative short-term reaction, this underperformance tends to diminish over a longer period of up to three years after the M&A announcement.

What can be concluded about the viability of M&A in the insurance market?

Based on past empirical evidence and the study's own investigation, M&A appear to be a viable model for success for all parties involved in both the US and European markets.