By Ashish Tiwari
Oct 20 - (The Insurer) - Insurance IPO activity in 2025 has shown stark regional contrasts. While the U.S. has seen a surge in activity as tech-driven insurers capture investors' attention, activity in the UK and Europe has been subdued amid liquidity shortages and valuation hurdles.
In the U.S., Neptune Insurance's $3.1 billion debut, Slide Insurance's $2.6 billion listing and HCI Group's Exzeo Group, which is targeting a valuation of up to $2 billion in its U.S. IPO, are among examples that have shown heightened investor appetite for profitable business in the insurance space.
Cristiano Dalla Bona, co-head of U.S. equity capital markets at Mergermarket, said this latest wave of U.S. insurance IPOs is differentiated by "the breadth of business models coming to market, with a focus on insurtech offerings".
Dalla Bona highlighted that while some insurance platforms carry significant underwriting exposure, others – particularly MGA and broker-driven businesses – are asset-light.
He noted: "The broker model is especially attractive because it doesn't require holding underwriting risk, operates with light capital intensity and remains a deeply fragmented sector, offering ample opportunities for growth through consolidation."
The U.S. market benefits from a deep, insurance-savvy investor base in New York, a regulatory environment supportive of public offerings and a valuation premium that has grown in the aftermath of the COVID-19 pandemic.
EUROPE AND LONDON IPO ACTIVITY LAGS
By contrast, IPO activity across Europe and London remains subdued in 2025.
The London Stock Exchange saw only nine new listings in the first half of this year, none of which were in the insurance space.
Market uncertainty, geopolitical tensions and macroeconomic challenges have dampened investor appetite and delayed many IPO plans. Some hoped-for European insurance IPO activity failed to materialise.
Inigo, once considered a strong IPO candidate, opted for acquisition rather than going public. Similarly, Centerbridge Partners-led Canopius withdrew its IPO plans earlier this year.
Aspen Insurance, closely linked to the London market, chose to list in New York instead, seeking higher valuations and more favorable conditions in the U.S. market, and has since agreed to be acquired by Sompo in a $3.5 billion deal pending regulatory approvals.
Despite these headwinds, analysts remain cautiously optimistic about a likely rebound in activity in Europe in the months to come, fuelled by regulatory reforms and renewed M&A activity. Nevertheless, the environment remains risk-averse and focused on profitability and resilience.
Erickson Davis, head of European equities, KBW, said: “In general, across sector, EU and UK IPO activity has been subdued versus US activity levels.” He pointed to liquidity differentials: “Liquidity profiles of listing venues is a major factor in this, particularly in insurance where there is often an international business mix or distribution profile to the company which enables more flexibility in an IPO listing decision.”
This dynamic is evident in insurer valuations. More liquid U.S.-listed stocks which have offered a way to play a hard market have been easier investments for global fund managers than less liquid UK or EU alternatives. Davis added: "We find the relative valuation multiples on several UK and EU-listed insurers too cheap to ignore, particularly as capital return dynamics play out.”
The post-pandemic era has also shifted valuation premiums. “It’s also noteworthy that in the post-COVID era, a valuation premium for U.S.-listed insurers has emerged. This is most pronounced in the reinsurance space when looking at Bermudians vs Lloyd’s stocks,” Davis said.
London’s challenges are heightened by Brexit-related market access issues and macroeconomic headwinds, according to Lukas Muehlbauer, research associate and Europe director, IPOx.
“(The) UK’s new listing rules to simplify requirements and attract more companies are a step in the right direction,” Muehlbauer, said. He added that “sizeable European IPO candidates have opted for sales rather than listings”.
U.S. mortgage insurer Radian's $1.7 billion acquisition of UK-based Inigo is one such example, which “removed another potential IPO candidate from an already thin roster of prospective London floats”, according to Muehlbauer.
REGULATORY AND STRUCTURAL CHALLENGES
Against that backdrop, Allianz CEO Oliver Bäte acknowledged the pull of deeper U.S. markets. “For Europe's largest insurer, it would currently be a rational decision to move to the New York Stock Exchange,” he said at the Bundesbank's Financial Center Conference in Frankfurt in September.
A 2024 report by former European Central Bank president Mario Draghi on European competitiveness shed light on these structural challenges, emphasizing that “capital markets in Europe remain fragmented”.
This fragmentation leads to “higher compliance costs and inefficiencies,” which weigh heavily on companies seeking to list in Europe, the report stated.
Draghi and Bäte’s observations underscore the tough structural situation for European insurers, who face weaker liquidity and limited capital market support compared to their U.S. peers.
Elaborating on the scope of dual listings, Fitch senior director Gerald Glombicki said: "There’s not many companies that do that because it’s pretty expensive and there’s a lot of regulatory burdens to it, and some who do, don't get the benefit of being dual listed.”
Meanwhile, IPOx’s Muehlbauer highlighted the limitations in crossing markets. “Some European insurers may look at a U.S. dual listing to reach a larger pool of investors, yet they may also have to factor in higher underwriting fees on average and greater litigation exposure in the U.S., so it isn’t an automatic choice," he said.
((ashish.tiwari2@thomsonreuters.com))
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