Mergers and acquisitions likely to increase next year

The Solvency II capital regime will cause a spate of European takeovers, with smaller players likely to be bought out by larger firms, according to a study by Morgan Stanley and Oliver Wyman.

Some smaller insurers may have difficulty meeting the Solvency II requirements, leading to buyouts, according to the study.

Mergers and acquisitions are likely to increase next year as insurers prepare for the new programme, according to Morgan Stanley and Oliver Wyman.

The study said that the toughest capital requirements will be imposed on non-life insurers, but that reinsurers could see an increased demand for their services as a means of moderating risk.

The Solvency II review is designed to make sure insurers are sufficiently capitalised to meet claims, and is due in 2013 across the European Union.