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October 11, 2025

Insurers' M&As in the United States during the 1990‒2022 period: Is the Fed monetary policy a causal factor?

GDGeorges DionneHEC Montréal AFAkouété‐Tognikin FenouHEC Montréal MMMohamed MnasriHEC Montréal

Key Points

Mergers and acquisitions in life insurance plunged significantly after 2012 due to low interest rates.
From 1990 to 2012, trends in life and nonlife insurer M&As were parallel, but diverged sharply post-2012.
The study attributes the reduction in M&As in the life insurance sector to the Fed's quantitative easing policy.
Evidence shows variable annuity sales and profitability declined in life insurance after 2012, impacting M&As.

Abstract

Abstract We investigate the causes of the gap in mergers and acquisitions (M&As) between life and nonlife insurers in the United States from 1990 to 2022. Our causality analysis indicates parallel trends between M&As in the life insurance and nonlife insurance sectors from 1990 to 2012, and a significant difference after 2012. There was a shock in the life insurance market that resulted in a reduction in M&As after 2012. Variable annuity sales and profitability in the life insurance sector declined after 2012. We find evidence that low interest rates observed after the implementation of the Fed's quantitative easing policy from 2008 to 2012 caused the difference in M&As between the life and nonlife sectors after 2012.

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Cite This Study

Dionne et al. (Wed,) studied this question.

synapsesocial.com/papers/68e9b1c9ba7d64b6fc1327cd https://doi.org/https://doi.org/10.1111/rmir.70024

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