2019 will be a black year for large M&A deals, those worth over 100 million dollars. Words from Willis Towers Watson, one of the leading global consultancy and brokerage firms, listed on the Nasdaq and also present in Italy with 450 employees: according to the latest results of the Quarterly Deal Performance Monitor, drawn up in partnership with the Cass Business School, the The global M&A market experienced, for the first time, a negative performance for seven consecutive quarters. “This year, so far, both the volume and the number of deals are down, and there are no signs of a reversal,” he comments with FIRSTonline Gianmarco Tosti, Country manager Willis Towers Watson Italy: “The reason for this negative trend? More psychological than anything else: we note the impact of geopolitical and commercial uncertainties, such as Brexit and the US-China tariffs. This does not favor a climate of confidence among investors and dampens the propensity for large investments".
The data from the Monitor are incontrovertible: the volume of operations in the second quarter of this year it is the lowest since 2009, with 144 deals completed so far. Looking at Europe alone, volume is the lowest since 2013 and for the first time in five years, no major deals (those valued at over $2019 billion) were completed in the second quarter of 10. In this scenario of uncertainty, how much does the Italian situation weigh, seen from the outside? "Italy - claims the Italian country manager of a group present in 140 countries worldwide, with a total turnover of 8,6 billion - is a country of excellence, but which has been experiencing the problem of economic growth for too many years, which does not guarantee social equity, as demonstrated by the great gap between North and South. However, we are always a market of great interest, because it represents first-rate manufacturing and has an evolved financial system, and for better or for worse it has maintained a certain political stability. There are countries that are growing faster than us but are more politically unstable, such as some emerging non-EU countries for example".
One of Willis Towers Watson's core businesses is to provide risk management solutions. First of all at a technological level, given the spread of difficulties related to cybersecurity: according to a recent study, conducted on 467 companies in various industrial sectors in 17 countries, the losses suffered by companies due to cyber attacks amounted, on average, to 4,7, $XNUMX million in the last fiscal year, wt more than one in ten companies that lost more than $10 million. “Prevention is important – explains Tosti -, because a very high percentage of cyber risks originate from a person's action, such as opening a wrong file for example. Sometimes it derives from the simple fact of not knowing the technologies well and for this reason our consultancy acts on three axes: personnel training, insurance protection and reinforcement of the company's IT structures”.
To prevent and measure these - but also other - risks, Willis Towers Watson has launched Connected Risk Intelligence, a system of algorithms that use Big Data but also historical data from client companies and which help to prevent and manage in an increasingly sophisticated way financial risks. “It is the evolution of the IGLOO software – says the Italian manager -, which we already make it available to insurance companies our customers, including the major Italian ones. Now we also apply it to other corporate customers, with the aim of directing them towards the most correct choice, on that very fine line between accepting risk and insuring it. That is, we are able to advise whether to insure a risk and to what extent to do so, at what level of deductible". Not only cyber-risks, as mentioned: also those linked to climate change, one of the paradigms of the moment both on a political and financial level, given that globally more and more investments are diverted to a sustainable economy.
How to prevent phenomena which by their nature are highly unpredictable? “The goal is to reduce volatility as much as possible, and for this we have a team of highly specialized engineers, capable of mapping the risks associated with accidental but increasingly frequent events such as floods, hurricanes, droughts. For some of these events there are easily available insurance coverages: the same insurance companies are reorganizing themselves, considering a trend of ever-increasing costs for coverage for catastrophic events linked to climate change. It's a serious issue that needs to be tackled and resolved at a political and global level”, concludes Tosti.
