Japanese insurer Tokio Marine Holdings Inc, one of the country’s most acquisitive companies, has a $9 billion war chest for overseas purchases and is scouting for deals in Asia as it looks to boost its profits from the region.
“We are always considering strategic options in countries like India, Indonesia, Thailand, Malaysia and the Philippines,” Chief Executive Tsuyoshi Nagano told Reuters, adding the insurer was now looking to double Asia’s contribution to its overseas profits.
Tokio Marine, Japan’s largest property-and-casualty insurer by market value, has already spent more than $15 billion in the past decade to buy specialty and other insurance businesses in the United States and elsewhere.
“We are building a stable business by diversifying geographically and operationally,”
Southeast Asian countries are a popular destination for foreign insurers given the region’s strong economic growth, rising middle-class income and lower insurance penetration.
Now, there is additional reason for cheer as according to sources, Malaysia is likely to review a directive to foreign insurers to reduce ownership of their local units.
Tokio Marine will also continue to look for deals in the United States and Europe, Nagano said.
Over the past decade, Tokio Marine has made three big U.S. purchases – specialty insurer HCC Insurance Holdings for $7.5 billion in 2015, Delphi Financial Group for $2.7 billion in 2012 and Philadelphia Consolidated Holding for $4.7 billion in 2008.
These deals are expected to account for nearly 80 percent of Tokio Marine’s overseas profits in the year to March 2019, the company said.
Japanese insurers have been accelerating their pace of foreign acquisitions over the past few years with an aging population and low interest rates denting returns at home. Heightened exposure to natural disasters has also raised their need to spread risk geographically.