Global merger and acquisition activity among insurers dropped 29 percent in the year through June as falling pricing and lower investment returns tempered demand, according to London-based law firm Clyde & Co.

Some 362 transactions were completed from July 2012 to June 2013, the fewest in four years, the  law firm said in a report Monday. That compares with 510 deals the previous year. U.S. transactions declined 40 percent, while deals in Europe slid 33 percent. Asia was little changed, with 57 deals versus 58 in 2012, Clyde reported.

“It’s not the greatest environment for M&A,” Andrew Holderness, global head of corporate insurance group at Clyde & Co., said in a telephone interview. “Pricing has remained soft, investment returns on assets under management are a challenge and there is uncertainty in the euro zone and the U.S.”

Reinsurance rates fell in seven of the last 10 years, according to the Guy Carpenter World Property Catastrophe Rate on Line Index, as an influx of third-party capital increased competition. Investment returns have also remained under pressure as efforts from the U.S. Federal Reserve to stimulate growth sent bond yields near record lows.

Some insurance companies are also trading below their historical book value, preventing transactions from being completed, according to the Clyde report. Insurers with excess capital are buying back stock rather than pursuing a takeover target, the firm said.

Holderness said there are early signs of an M&A recovery, adding it is too soon to call a turn in the cycle.

Clyde & Co. operates from 33 offices and associated offices on five continents. It specializes in insurance, aviation, energy, infrastructure, marine and trade.