Deal activity is expected to remain a factor in the insurance and reinsurance industry as chief executive officers look to gain scale and diversification to stay relevant in the market, the PwC Insurance Summit heard.

Insurance deals involving the US market soared to $8.1 billion in the third quarter, a 326 per cent gain compared with the same period last year, according to PwC research. Apollo Global Management announced the acquisition of Bermuda-based Aspen Insurance Holdings for $2.6 billion in the largest deal of the third quarter. The transaction is one of the latest of private equity firms expanding into insurance assets.

Speakers at the PwC Insurance Summit, which was held at the Hamilton Princess Hotel and Beach Club, also focused on insurtechs and how they are beginning to reshape the entire insurance value chain — including product creation, marketing, and distribution to data analysis, underwriting, and claims management.

According to PwC’s Global CEO Survey 2018, insurance company leaders are more concerned about a lack of digital skills than their counterparts in other financial services sub-sectors, with one of every five CEOs at insurers saying it is very difficult to attract digital talent. Several have already aligned with insurtech start-ups and launched more than 300 pilot projects.

Speaking at the summit, Eric Andersen, co-president, Aon, said: “The deals I find most interesting are more vertical where people are buying into ownership of alternative capital, reinsurance to insurance, insurance to reinsurance, insurance to alternative capital — because ultimately everybody is trying to capture the value that each of those groups has provided to the market as a way to becoming more competitive in their primary market.”

Mr Andersen added: “What I am really fascinated by and watching really closely is this alternative capital group and how it ultimately gets to primary. There’s a lot of experiments going on.

“I think these types of acquisitions are going to continue, because ownership of the capital all way through the chain seems to be becoming a priority for a number of the larger players.”

Mr Andersen also spoke of the industry’s critical role in society. He, “Business plays a materially important role in the economics of corporates and countries. Our ability to help people rebuild and protect their assets is a critical component.”

The “next wave of growth” for the industry, he said, will be how it can help solve new risks such as cyber, and intellectual property and how it can help governments de-risk.