Recent M&A activity in the insurance sector of the Asian markets has been rather subdued. Basically, all of these have occured in life insurance.

Furthermore, it is interesting to note that bargain hunting has not taken place to any noticeable extent after the Asian asset meltdown.

Valuation perception gaps, occuring from the absence of the credible accounting principles has made it extremely difficult to value assets and (hidden) liabilities.

It is expected, however, that the return of stability to Asia, the unfolding of a more competitive and transparent business environment and changing attitudes on the part of corporate and government decision makers will fuel industry consolidation in the medium-term.

Given the various obstacles facing domestic M&As, (such as small and relatively illiquid capital markets and lending restrictions imposed on domestic banks), foreign insurers are likely to play a major role in the process of consolidation.

Recent M&A activity