Global M&A roared back in 2025 and is set for another active year, with big-ticket deals, tech-driven targets and portfolio pruning reshaping the landscape in insurance and beyond.
McKinsey’s latest annual M&A report showed global deal value rising 43% to $4.7 trillion in 2025, up from $3.3 trillion in 2024 and roughly 20% above the ten‑year average. Deal volume was broadly flat, but transactions of $10 billion and above jumped to 60 – the highest since the 2021 post‑COVID peak – and accounted for 28% of total value. Activity reached 4.2% of global market value, up from 3.3% a year earlier, though still below the ten‑year average of 5.3%.
After several years of geopolitical, trade and macro shocks, McKinsey said more executives were turning to deals as a way to adapt quickly, securing capabilities, managing costs and reshaping portfolios when organic growth is uncertain.
Only about a third of executives surveyed in 2025 said they were confident in their ability to manage major external challenges such as trade policy shifts or global crises. That anxiety has helped push strategic buyers to use M&A more actively rather than relying solely on internal investment.
Eighteen fast‑growing “arena” industries – largely digital and tech‑enabled sectors such as software, AI infrastructure, data platforms and some breakthrough health fields – accounted for around 40% of 2025 deal value, up from 7% two decades ago. These arenas carried an average EV/EBITDA multiple of 27x, versus roughly 16.5x for more established industries.
Corporate acquirers from traditional sectors now make up about a third of deal value in arena targets, with financial sponsors also increasing exposure, according to the report.
For insurers, that trend is visible in acquisitions and partnerships around data and analytics, cyber and digital infrastructure, distribution and health tech, as carriers look to support underwriting, pricing, fraud detection, claims and customer engagement.
Within financial services, McKinsey reported deal value rising 43% to about $660 billion in 2025, with in-market consolidation a key theme in Europe and ongoing opportunities in the fragmented US banking market.
While insurance-specific figures were not broken out, sector deal flow in recent years has been dominated by carrier and specialty consolidation, as well as distribution roll-ups, including broker and MGA acquisitions by both strategic buyers and private equity.
Portfolio optimization has also been prominent, through life and annuity back‑book disposals, exits from smaller or less profitable geographies, and carve‑outs of non‑core books. McKinsey noted that divestitures rose 30% in 2025 to $1.6 trillion, the highest since 2021.
Private equity’s role in insurance also continues to expand, with sponsors active in life back‑book platforms, specialty carriers, MGAs, TPAs and insurance infrastructure such as claims and administration tech. Globally, PE deal value rose 54% to $1.2 trillion, supported by a large stock of dry powder and mounting pressure to exit long‑held assets.
The Americas, particularly the US, led the rebound, with deal value up 64% to $2.9 trillion, supported by lower interest rates, strong equity markets and relatively accommodative regulatory conditions in many sectors.
Asia–Pacific saw deal value rise 21% to $825 billion, with more cross‑border flows and domestic consolidation, especially in advanced manufacturing and tech supply chains.
Meanwhile, EMEA posted a 16% increase to $998 billion, driven by larger transactions, financial services consolidation and portfolio restructuring in capital‑intensive industries.
McKinsey said AI and generative AI were already shortening deal cycles by 10% to 30% and cutting M&A costs by around 20%, as acquirers used tools to scan for targets, accelerate due diligence and support integration planning.
For insurance executives and deal teams, competition for tech and data assets is intensifying and will likely keep valuations high for attractive targets. Portfolio pruning is now a mainstream value lever, with boards expecting more frequent, data‑driven reviews of non‑core lines and markets. Private equity, according to the report, also remains a powerful force in reshaping insurance balance sheets and distribution, as both a buyer and a capital partner.
With global M&A back above long‑term averages and capital still available, insurance groups that enter 2026 with clear deal blueprints, disciplined portfolio strategies and credible AI capabilities are likely to be better positioned in what remains a volatile but opportunity‑rich deal environment, the report said.
