PwC report: 2026 sees shift in M&A activity from life to P/C

The property/casualty side of the insurance industry saw an uptick in merger and acquisition activity during the first half of 2026, driven largely by carriers looking to “deploy excess capital,” according to PwC’s US Deals 2026 Midyear Outlook.

Mark Friedman, PwC partner and U.S. insurance deals sector leader, said this differs from previous trends, where activity was primarily in the life insurance and annuities sector.

However, he told InsuranceNewsNet that activity has been “good” overall across the insurance board.

“All good in terms of activity across all subsectors of insurance, but I think the big difference to highlight is we are seeing much more interest on the P/C side,” Friedman said. “We’ve seen a bit of a pivot just in terms of where the deal activity is. It’s a bit of an interesting time in the sector.”

He explained that, going back several years, “it was pretty consistent” to see consolidation activity in the life insurance and annuities sector and brokerage consolidation, with “a fair amount of activity” around the ecosystem of managing general agencies and delegated authority.

“We continue to see a ton of interest on the life and annuity side,” Friedman said. “A lot of that has moved into alternative reinsurance vehicles as opposed to pure play acquisitions. We have seen some acquisition activity in that space. We, obviously, saw the big merger of two public companies, but I’d call that a bit more of an anomaly versus a trend.”

This is not for lack of demand, however, but rather for “lack of quality assets available,” he added.

Change in M&A appetite

PwC’s report noted U.S. M&A deal value hit $1.2 trillion for the first half of 2026, marking a nearly 100% increase since the previous year. While deal volume dropped, according to the report, value is noticeably higher and several megadeals have been struck. For example, Friedman mentioned Mapfre’s $1.54 billion acquisition of Safety Insurance Group this week.

He said this trend is expected to continue, with marked activity and interest around the P/C space, and noted he wouldn’t “judge the deal market as much by announced deals or closed deals as I do by the calls we’re getting and the interest we’re seeing in the market.

“We’re seeing a ton of interest on the P/C side. It’s a combination of P/C carriers that have had really good underwriting results over the last two-plus years and are looking to deploy excess capital to grow in strategic markets, products or just scale,” Friedman said.

He also said there is increased interest in both the U.S. specialty market and more broadly from private equity.

“We’re starting to see more appetite for insurance underwriting entities, carriers, as opposed to what we’ve historically seen, and a lot of interest in the brokerage MGA space,” he said.

Quiet on the brokerage front

In contrast, Friedman said activity on the brokerage side has been “quieter,” although not completely so, due to “a combination” of factors.

“One is that interest rates remain relatively high as compared to historical periods. The cost of financing those acquisitions is higher,” he explained. “We’ve also seen some volatility in valuations as a result of concern around how artificial intelligence may disrupt the insurance distribution model.”

For example, Friedman said that public company stocks of the Big 5 brokers traded at lower multiples and have “taken a bit of a hit just as a result of some concern around how AI may disrupt that business model going forward.”

Long-term care rising to the forefront

On the life and annuities side, Friedman said he expects the long-term care market to become “more appealing,” particularly as the aging U.S. population faces a longevity crisis.

“We now have a couple of dozen active players in different shapes and forms that are looking to consolidate the U.S. annuity space,” he said. “We’re seeing interest in life, and variable annuities are starting to become of interest to more players. We saw a deal recently in the long-term care space. We’re starting to see some more time being spent looking at long-term care.”

He said the main risk with long-term care is not only healthcare costs but also longevity risk, as “if somebody lives to 100, you’re going to pay out a lot more than if someone lives until 70.”

“We’ve said for a long time that the long-term care market will become more appealing to asset aggregators, asset managers, as over time, the legacy business in long-term care is pretty old,” Friedman said.

However, he noted that asset managers will have to “look to different frontiers,” such as Japan and parts of Europe, to “grow those books.” At the same time, He stated that asset managers are beginning to consider P/C for significant acquisitions, which are anticipated to continue in the future.

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