Insurance firms that carried out a significant acquisition in 2016 saw their share price perform worse on average than those that didnt for the first time in six years.
That is according to new research by Willis Towers Watson (WLTW), and is thought to be partly due to a high-value, low-volume environment, with the average deal price almost double that recorded in 2015.
"The market tends to be nervous around big, transformational transactions and more comfortable when most activity involves smaller incremental bolt-ons," says WLTW senior consultant, Brendan McMaster.
"All other things being equal, big transactions are generally deemed to be riskier for the acquiring company."
The research only considers deals with a value of at least $50m (£37.8m), with the findings reversing the pattern seen in the previous eight years when acquirers were likely to outperform their non-acquisitive peers.
It is also thought that geopolitical uncertainty following the Brexit vote and election of Donald Trump could have been factors in shareholders' cautious reactions to large transactions.
In addition, the research suggests the drop in deal volumes could be attributed to a slowdown in activity in the life sector, while strong equity markets may have been another reason for the weaker performance of acquisitive insurers.
"Equity markets are doing well, so firms don't need to do acquisitions as shareholders are rewarding those focusing on organic growth," WLTW director, Fergal O'Shea, said.
Separate research from WLTW tracking mergers and acquisitions (M&A) across all sectors reveals similar trends to those in insurance, with acquirers underperforming firms that did not do deals.
The consultancy suggests this could indicate that investors are in a "risk-off" mode, especially when deal values have been higher than normal.
However, O'Shea added: "Since 2008, insurance acquirers have outperformed the market, a trend that has become even more pronounced since 2012.
"M&A is still beneficial and it will be interesting to see what the data for 2017 shows."