Are Insurance Mergers and Acquisitions Value-increasing Activities? : Evidence from ASEAN Countries

This paper examines insurance mergers and acquisition in ASEAN countries to test the impact of the event for target insurers and acquiring insurers. Paired mean-comparison tests produce results similar to previous literature (Cummins and Weiss, 2004). The profit levels of target insurer increase after the event on average but those of acquirers do not. Regression analyses find that large, within-country, within-industry, and one-to-one deals provide an opportunity to insurers to harvest profits from mergers and acquisitions because those deals create larger, powerful and consolidated insurers in the ASEAN countries. Results from statistical analyses support the consolidation hypothesis but should be interpreted with care due to the limit on data availability.