Briefing: Why is Zurich so keen on acquiring Beazley – and will Beazley bite?

The first month of 2026 has not even concluded yet and it has already emerged that the UK general insurance (UKGI) industry could see its next major megamerger on the M&A horizon.

Following Aviva taking over Direct Line Group (DLG) in July 2025 and Ageas acquiring Esure shortly after in September, insurer Zurich is now looking to strike its own major deal, with the firm wanting to acquire 100% of Beazley.

Zurich first approached Beazley on 4 January 2026, submitting a purchase proposal of 1,230 pence in cash per share. This offer was rejected, however, with Zurich being told on 16 January 2026 that the offer was “significantly undervaluing” Beazley.

Zurich remains insistent on doing a deal and on 19 January 2026, it put forward an improved bid of 1,280 pence in cash per share.

Beazley reacted by saying that its board “has not yet had the chance to consider” the bid and urged its shareholders “to take no action”.

Benefits for Zurich

The potential for huge M&A deals this year does not come as a surprise.

According to professional services firm KPMG’s 2025 Insurance CEO Outlook, published in January 2026, 82% of bosses were confident in their company’s growth over the next three years, with this optimism underpinned by M&A deals.

According to KPMG’s research, half of the insurance chief executives polled expected to pursue ”high impact” deals over the next three years, driven by the need to build scale, manage regulatory costs linked to cyber and environmental, social and governance (ESG) requirements and expand into new markets and specialty lines.

As for Zurich, it believes that taking over Beazley would create a global leader in specialty insurance.

Analyst Peel Hunt said that “Zurich is following many of its European and US peers by expanding its commercial property and casualty (P&C) lines and entering the Lloyd’s specialty insurance market”.

In 2024, Zurich’s global P&C business generated gross written premium (GWP) of $47bn (£35bn), of which $5bn (£3.7bn) came from the UK.

Zurich recently reinforced this strategic direction through the creation of a global specialty unit at the end of last year, allowing for greater focus on specialty business.

Zurich believes taking over Beazley would help to establish a leading global specialty platform, based in the UK, that would bring in around $15bn (£11.1bn) of GWP.

Peel Hunt added: “We believe the key drivers of M&A in the London market are access and scale within the Lloyd’s market, efficient structures, breadth of distribution platforms and international underwriting licences.”

Will Beazley bite?

Zurich believes the suggested transaction with Beazley would deliver attractive returns for both Zurich’s and Beazley’s shareholders.

And its clear the insurer wants to get on with the deal, with the company reiterating to Beazley its desire to proceed at pace.

“Zurich’s offer price provides full value for Beazley across all relevant metrics and is designed to facilitate prompt engagement,” the insurer said.

But will Beazley bite? According to analyst Jefferies, “one might argue that Beazley is a stronger franchise than those acquired previously, with a differentiated cyber franchise and market leading return on equity (ROE) track record – thereby deserving of a better offer”.

Look at Ageas’ attempts to acquire DLG, for example. Ageas announced a possible £3.1bn bid in February 2024, before improving the terms of this a month later.

Both proposals were rejected by DLG, with Ageas then announcing that it had abandoned its pursuit of the insurer.

So, there is no guarantee Beazley will take up the improved offer from Zurich. The situation is in flux, however, and decisions are going to have to be made sooner rather than later given the mandatory deadlines within the purchase process.

Under UK takeover code rules, Zurich is required – by no later than 5pm London time on 16 February 2026 – to either announce a firm intention to make an offer for Beazley or to announce that it does not intend to make an offer.

So, time is ticking and it’s up to Beazley to play the next card. My stance? Zurich has the ability to be very persuasive and design an attractive bid for Beazley – I think the firm will struggle to resist this siren song.