Global insurance market report [gimar]

PARTICIPANTS IN 
MERGERS AND 
ACQUISITIONS IN 
THE INSURANCE 
SECTOR.

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equity-owned, an insurer’s asset-sourcing 
capabilities expand, but the investments could 
shift towards higher-returning, and therefore 
higher-risk, assets that are also less liquid.
Although the private equity/insurer relationship 
creates many synergies and benefits for each, 
many regulators see a conflict between the 
private equity firms’ quest for short-term profit 
and the prudent management of long-term life 
insurance liabilities. In their pursuit of short-term 
profits, firms may be tempted to invest more 
aggressively in riskier assets. However, there are 
investment laws and regulations insurers must 
adhere to, which helps limit such investments. 
3.3.4 Conclusions
While ULIP development has been quite volatile 
over the past few years, it has fluctuated within 
a narrow range. ULIP sales are somewhat 
correlated with long-term interest rates and equity 
market movements, especially in Europe. While 
still comprising a relatively small share of the 
entire life market, the ULIP business continues to 
grow, particularly given the current low-for-long 
environment. Demographic trends may further 
support the ULIP market as an increasing number 
of retirees are looking for more sustainable ways 
to support their financial future.
In the US in particular, the current market has 
led private equity firms to acquire life insurers in 
order to grow their assets under management 
and management fees. Supervisors may wish to 
monitor how the short-term view of private equity 
investors interacts with the longer-term horizon 
of life insurance business. While this trend is