Facing sluggish industry growth and agile new competition, insurance executives are actively pursuing acquisitions and partnerships to transform and grow their businesses, according to a new report from KPMG International, Accelerated evolution — M&A, transformation and innovation in the insurance industry.

In fact, 80% of insurance executives surveyed for the report expect to seek one to three acquisition targets or partnership opportunities over the next three years.

KPMG worked with Mergermarket to interview more than 200 global insurance executives involved in mergers and acquisitions (M&A), strategy and innovation initiatives at their respective organizations to learn about their outlook for the industry and their expectations as they plan to strategically deploy capital.

The majority of insurers are intending to make acquisitions that could transform their organization for the future, rather than merely enhance their current business and operating models. More than 60% of the 200 executives surveyed globally said transforming their business or operating model would be the key factors driving acquisitions, while just 21% identified enhancing their current model as the key factor.

“Insurers are competing for market share in a slow-growth environment, that is experiencing an influx of dynamic new insurtech players,” said Laura Hay, head of global insurance for KPMG International, in a statement. “They know they can’t rely just on organic growth to meet their objectives, so alliances and acquisitions become essential as insurers look to engage with customers in new and different ways, and gain access to innovative operating capabilities and technology infrastructure to reshape their business and drive future growth.”

In terms of geography, a majority of insurance executives are looking for inorganic opportunities outside their country of domicile, with 66% expecting to conduct cross-border deals, while just 32% say they expect deals to be focused domestically. The distinction is particularly telling with respect to partnerships and alliances over the next three years, with 39% expecting these to be cross-border and only 6% anticipating domestic alliances.

North America, particularly the United States, is widely expected by the insurance executives surveyed to have the most insurance M&A activity in the coming three years. Asia-Pacific is projected to be the region where insurers have the most partnership opportunities, and Western Europe is expected to drive relatively more divestiture activity.

Survey respondents were divided regionally among firms in Asia-Pacific, Europe, Middle East and Africa, and North America as well as by the segments life, non-life, reinsurance, and other , encompasses insurance brokers and Insurance services. Companies needed to have a minimum of US$1.5 billion in annual revenue to qualify for participation.