Japan’s Tokio Marine Holdings Inc will buy U.S. insurer Pure Group for about $3.1 billion, it said on Thursday, marking its latest sizable acquisition in the world’s biggest economy to offset slowing growth at home.
The deal, to be financed through cash on hand and external funding, is expected to close during the first quarter of 2020 and will see Tokio Marine keep Pure Group’s current management in place, Tokio Marine said in a statement.
Pure Group provides property and casualty insurance to high net-worth individuals across the United States and has become one of the top three players in that market since its founding in 2006, Tokio Marine said.
Japanese financial firms have been forced to look abroad for growth amid an ageing, shrinking population at home. Tokio Marine has pushed into both emerging markets and the United States. It bought Delphi Financial for $2.7 billion in 2011 and Philadelphia Consolidated for $4.7 billion in 2008.
The high net-worth insurance market is one of the few insurance businesses seeing strong growth in the United States, Tokio Marine said, as growth in the number of wealthy individuals outpaces that of the overall population.
Pure has achieved a compound annual growth rate of around 30% in the last five years and reached around $1 billion in managed premiums in 2018.
Tokio Marine, valued at $38 billion, is the world’s fourth-largest property and casualty insurance company by revenue, according to Refinitiv data. Shares of the insurer finished down 1.8% after the Nikkei newspaper earlier reported the news.© (c) Copyright Thomson Reuters 2019.