ACORD, a standards-setting organization serving the insurance industry, has released an updated version of the report Carrier M&A: Drivers, Impact and Outcomes, A detailed review of consolidation trends across the industry.
The publication assesses today’s drivers of insurance company acquisitions and considers their impact on business models, technology alignment and investor returns.
Based on its research, ACORD reviewed nearly 500 completed carrier transactions across 84 countries between July 2023 and December 2025.
The findings indicate that more than two-thirds of these transactions resulted in positive value, while nearly one-third had a negative impact. ACORD measures performance by the total shareholder return achieved by acquired companies and compares it to the MSCI World Index.
The report notes a clear evolution in the popularity and effectiveness of different acquisition strategies compared to patterns over the past decade.
ACORD observed that deals aimed at increasing scale or expanding the scope of operations have lost importance, falling to the third most common motivation. This approach, centered on cost efficiency and expanded coverage, still struggled in terms of results and was the only category to post negative returns overall, with an average decline of 13.6%.
In contrast, ACORD noted a significant increase in diversity-led deals. The strategy, once relatively uncommon and associated with poor performance, has become a major driver of deal activity, accounting for 41% of acquisitions. At the same time, its performance has improved significantly, with an average return of 13.7%, marking a significant shift in usage and effectiveness.
ACORD further reports that deals focused on acquiring specific features, while limited in number, are delivering the strongest performance. These acquisitions, which accounted for only 6% of analytics deals and were designed to enhance expertise or accelerate capability development, had the highest average return at 27.7%.
ACORD reports that insurance company transaction activity has dropped significantly from a high of 321 transactions in 2016 to around 163 transactions in 2025. The group attributed the slowdown to a more difficult trading environment caused by rising capital costs due to rising interest rates, ongoing inflationary pressures, geopolitical instability and a stricter regulatory environment.
At the same time, ACORD observed a clear shift in the nature of transactions being completed. While overall deal volume has declined, deal size has grown significantly. The average disclosed value of operator deals between 2015 and 2024 was approximately $455 million, but this figure has risen significantly to approximately $1.1 billion in 2025, indicating that the number of transactions is decreasing but significantly larger.
“The poor performance of size and scope as buyer motivations highlights the difficulty of realizing scale-related benefits through M&A. Increasing scale only amplifies problems that are already there, including inherent limitations and challenges; it rarely transforms,” commented Dave Sterner, senior vice president of research and development at ACORD. “Scale benefits are often overestimated, while cost synergies are smaller than expected. Integration risks are also systematically underestimated, and diseconomies of scale are ignored.”
“For deals that fall short, the value destruction is primarily driven by execution rather than deal logic,” Sterner added. “Without rigorous value capture management, synergies identified during due diligence often disappear during the integration process.”
Sterner continued: “As insurance M&A continues to move toward fewer, larger, and more complex transactions, disciplined execution will continue to be the decisive difference between getting a deal done and one that delivers lasting results.”
“Organizations that protect their core business, translate deal intent into focused value initiatives, establish clear decision rights, and engage in deliberate sequential integration are better able to sustain value creation.”