Edition 17 - Off to a flying start

What a year 2024 was and 2025 is already off to a flying start. We’ve been busy over the last several weeks publishing our usual set of predictions for the year with our ’10 to do’s for Insurance CEOs in 2025' available here and our ’10 Trends in Asset Management for 2025’ available here — both well worth a read and capturing many of the themes I’ve explored in these newsletters. Overall, I’m expecting 2025 to be a bumper year for M&A. Within Life and Asset Management, we will see the mega themes around public-to-private shifts, the rise of alternatives, global population ageing and the retirement opportunity, and the asset management-led insurer model continue to drive activity while P&C will be vibrant for reasons excellently described by my colleague George Netherton in a recent Insurer article and available here.

It’s impossible at this time of year to avoid reflecting on the year that was. The chart below shows 1-year (2024) total shareholder return (vertical axis) compared to forward price-earnings multiple for large publicly quoted global life and asset managers. The dispersion on both axes is notable.? As usual the private capital players dominate the Northeastern quadrant. The Northwestern frontier has many who performed strongly in 2024, principally given benign equity market and rate environments, though with some idiosyncrasies. Overall, however, the ‘Western hemisphere’ in the chart is still characterized by a lack of strong investor story around future growth prospects despite overlapping footprints in many cases with growth players. Bold moves are required and we’re beginning to see more of these emerge — here’s to an interesting 2025 where we see more of those on the left achieve ‘escape velocity.’

Lots of news over the last month related to the asset management-led insurer model in particular:

• January 23: Prudential Financial and Dai-ichi Life Insurance Company announced their intent to pursue a strategic partnership focused on product distribution and asset management capabilities.? The partnership will include a product distribution agreement in Japan, where Prudential will distribute products from Dai-ichi’s subsidiary, The Neo First Life Insurance Company, through Prudential’s Life Planner sales channel. In addition, PGIM, Prudential’s global investment manager, will provide asset management services to subsidiaries of Dai-ichi Life Holdings through its PGIM Multi-Asset Solutions (PMA)?business including asset classes such as structured products and private credit.
• January 22: Prudential Financial announced an agreement to reinsure approximately $7BN of reserves backing USD-denominated Japan whole life policies to Prismic, the Bermuda sidecar sponsored by Prudential, Warburg Pincus and a group of global investors. As part of the transaction Prudential intends to make an investment in Prismic of approximately $100MM alongside a group of global investors who will invest an additional $400MM approximately.
• January 21: BPCE and Generali announced that they had signed a non-binding agreement to create a 50:50 joint venture between their asset management businesses (Generali Investment Holdings and Natixis Investment Managers). The JV will manage EUR 1.9 trillion ranking #9 worldwide by AuM and #1 in insurance AuM.?Amongst the elements called out were “Critical scale in the fast-evolving asset management market, leveraging a complementary geographical presence in France, Italy, and the United States, along with diversified expertise and a broad range of high-quality investment affiliates and teams,” “Enhanced offering in private assets to meet the growing expectations of clients in these asset classes. To achieve this strategic goal, the newco would notably capitalize on the seed commitment and permanent capital provided by Generali,” “Global distribution capabilities to serve all types of client needs with innovative, diversified investment strategies and solutions” and the “Potential to unlock value through a powerful combination achieved with the scope of assets brought by BPCE and Generali, a €15 billion seed money commitment from Generali, as well as via synergies and growth opportunities.” Woody Bradford, the current CEO of GIH, will serve as CEO of the entity, and Philippe Setbon, the current CEO of Natixis Investment Managers, as Deputy CEO.
• January 15: RGA announced a strategic investment in PACT Capital LLC, an independent investment firm focused on providing capital and strategic support to middle-market alternative asset management firms.?
• January 13: Apollo announced that it had entered an agreement to acquire Argo Infrastructure Partners, a mid-market asset manager targeting essential infrastructure assets (digital infrastructure, renewable energy, transportation, utilities and other industries) in North America.
• January 8: MetLife announced that it had reached a definitive agreement to acquire the high yield and bank loan, strategic fixed income, and small-cap equity teams (about 20 investment professionals) and approximately $6BN in related assets managed by Mesirow.? MetLife noted that, “The acquisition will advance the development of MetLife Investment Management’s (MIM) leveraged finance platform, adding opportunistic high yield and bank loan strategies with risk-return profiles that complement MIM’s current offering, including the strategies anticipated to be added through the recently announced acquisition of PineBridge Investments.”
• December 23: MetLife announced that it had reached a definitive agreement to acquire PineBridge Investments, a global asset manager with approximately $100BN in AuM, from Pacific Century Group for $800MM in cash at closing, $200MM subject to achieving certain 2025 metrics, and $200MM subject to a multi-year earnout. MetLife commented that “This transaction will add substantially to MetLife Investment Management’s already strong franchise by expanding our public and private credit offerings, including a robust leveraged finance platform, as well as extending our global capabilities.”

Separately, while the global retirement decumulation opportunity has sometimes been described as ‘always 3 to 5 years away,’ it was interesting to note that on January 13, 2025, BlackRock announced that its LifePath Paycheck, a target-date solution which provides the option for guaranteed lifetime income, is the fastest growing lifetime income target-date strategy in the defined contribution market having launched in April 2024, and with now with $16B in assets under management.

That’s it for this edition of Reinventing Insurance.

Oliver Wyman latest publication releases

• Growth, Relevance, Resilience: 10 to do’s for Insurance CEOs in 2025: In this third edition of our annual provocation to C-suite executives, we propose 10 actions to keep up the pace and drive reinvention in the insurance industry.
• 10 Trends in Asset Management for 2025: What’s next for Asset Management in 2025? Our annual 10 predictions take a?look ahead at?what?will shape the industry in 2025 and for years to come.?We cover a broad range of themes?to generate alpha and stimulate new client energy, including integrated retirement solutions,?public and private markets, investment strategy, captives and?bolder?deal-making.
• George Netherton’s exclusive interview with The Insurer: After a strong finish to last year, 2025 is expected to be a vibrant year for European insurance industry #M&A. In an exclusive interview with @TheInsurer, @George Netherton, [JW1]?Partner and Head of Europe Insurance and Asset Management at Oliver Wyman recently shared the compelling drivers. Read it here
• 2025 World Captive Forum: Join our Oliver Wyman team at this year’s World Captive Forum on February 5-7 in Orlando, Florida. Adam Lewis, partner in our P&C Actuarial business and global captives leader is leading discussions on capital modeling, captive strategy, and leveraging data and analytics. Alex Wallace, principal is leading discussions on social inflation and liability lines. Jennifer Feldheim, senior associate risk manager at Marsh McLennan is presenting on strategic captive uses and future resiliency. The event brings together more than 450 risk managers, benefit managers, and financial executives and continues to serve as a premier event for those managing risks through captive insurance companies or exploring captive insurance company formations.

Reinventing Insurance Newsletters

In this newsletter, my aim is to pick topical issues and news and relate them to the macro issues happening in the insurance industry. I publish regularly and look forward to your thoughts and comments.

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• Edition 1: A look at the macro shape of the Insurance Industry
• Edition 2: A look at the latest insurance macro trends
• Edition 3: A Look at Personal Lines P&C
• Edition 4: Become an Asset Management-Led Insurer
• Edition 5: P&C market cycles, underwriting challenges, and relative sources of profitability
• Edition 6: Private equity’s rapid growth in the insurance sector
• Edition 7: CIAB Meeting Dispatches
• Edition 8: Asset-owned Insurer moves (US & UK); Growth opportunities in Asset & Wealth Management
• Edition 9: Risk Fluidity, Earnings notables
• Edition 10: Macro views and growth trends
• Edition 11: Leadership agendas for 2024
• Edition 12: Surplus lines revolution: Exploring the growth in non-admitted insurance markets
• Edition 13: The trillion-dollar insurer
• Edition 14: Escape trajectories
• Edition 15: Life at the half-way mark
• Edition 16: Riding big secular tailwinds

Mick Moloney is a Partner at Oliver Wyman, based in New York. He is Global Head of Insurance & Asset Management and Managing Partner for Oliver Wyman Actuarial. In combination, these groups include over 750 colleagues globally dedicated to providing advice to Life, P&C, and Health insurers, asset managers, and private capital sponsors across strategy, operations, technology, finance, risk, and actuarial disciplines.

Mick spends his time working with leading insurers, asset managers, and advisory firms on a range of strategic and execution topics with a particular focus on growth, innovation, and efficiency in retail and institutional markets. He’s passionate about growth and reinvention in the industries he serves, with a strongly held belief that while each is facing disruption and dislocation, there are massive unmet needs which provide the prospect of a bright and vibrant future.