By Lewis Nibbelin, Research Writer, Triple-I
Deals exceeding $1 billion drove insurance industry mergers and acquisitions in 2025, aligning with a surge of artificial intelligence-based megadeals in the broader M&A market, according to PwC’s U.S. Deals 2026 Outlook. While total M&A deal value rose to $1.6 trillion through November 30 – the second-highest value ever recorded – the insurance sector remained consistent, though ongoing economic uncertainty could challenge this stability.
Upward trends emerge
Owing 93 percent of its value to megadeals, the insurance industry’s deal volume totaled $31.8 billion during the second half of 2025, compared to $30 billion during the previous six months. Heading into 2026, PwC projects that both improved loss ratios and rising pressure on property and casualty rates will facilitate further deals, as the industry’s performance can attract investors while also leading carriers to seek growth through more acquisitions.
“In coming months, expect interest rate developments and an industry-wide search for growth to strongly influence insurance deals activity,” said Mark Friedman, PwC U.S. insurance deals leader.
Conversely, total M&A market value increased by 45 percent from 2024, with more than 20 percent of its 74 deals valued at $5 billion or more relating to A.I. Such market activity suggests “A.I. is significantly accelerating software and consumer goods development” by boosting portfolio strategies, operational efficiencies, and other gains across various industries, the report notes.
Ramzi Ramsey, a senior managing director at Blackstone Growth, emphasized the increasing role of A.I. as a core driver of M&A growth, arguing that “companies who are viewed to benefit from AI tailwinds are seeing outsized multiples and deal activities,” whereas “companies where AI is viewed to be a detractor, or if the AI impact is cloudy, may have no bid.”
Middle-market lags
Though still the third-largest in the past decade, overall M&A market volume rose by only 2 percent from 2024, with middle-market deals between $100 million to $1 billion slumping to their lowest volume since at least 2013. Tariff policy shifts largely fueled these figures, reflecting greater caution among dealmakers – particularly smaller businesses – as supply-chain risks became more unpredictable.
While sudden policy changes and recent trade disputes could persist into the new year, PwC’s report found that “interest rate cuts this year have already helped mid-tier corporates, and further Federal Reserve Board action in 2026 could go a long way in relieving pressure on them,” especially as current tariff policies continue to stabilize.
In combination with declining interest rates, “products that can withstand declining consumer performance and confidence” should help the insurance sector remain active in 2026, the report adds, pointing to A.I. investments as essential to maintaining “solid ground” in the M&A market.
Learn More:
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Despite Headwinds, P/C Insurance Industry Maintains Course in 2025
JIF 2025: U.S. Policy Changes and Uncertainty Imperil Insurance Affordability