IMPACT OF MERGERS AND ACQUISITIONS ON EUROPEAN INSURERS: EVIDENCE FROM EQUITY MARKETS

The current macro-economic and financial conditions remain extremely challenging for the European insurance sector. Due to the ongoing low-yield environment and competitive pressure from new players, in particular technology-focused start-ups entering the markets, insurers are changing their business models and looking for new investment and business opportunities to improve their profitability and overall solvency positions. This is also reflected in increasing interest in mergers and acquisitions to achieve sufficient returns. However, there is no clear answer in the literature as to whether this strategy brings the anticipated positive results. This study empirically tests the effects of mergers and acquisitions (M&A) on the share prices of European insurers via an event study. Our results do not confirm the positive impact of such strategies on acquirers’ share prices delivering abnormal returns for shareholders.