Nippon Life Insurance has agreed to buy a 20% stake in Texas-based life insurance provider Corebridge Financial for more than $3.8 billion, representing its full-fledged entry into the American market amid declining demand in Japan.
The move is the largest acquisition made by a Japanese insurer, according to Nikkei Asia.
Nippon Life expects its core operating profit to increase by $580 million annually because of this investment. At present, Corebridge Financial ranks third in the annuities market.
“We need to pursue further growth overseas. There are still many opportunities,” Nippon Life Insurance Managing Executive Officer Minoru Kimura told the media.
Kimura also said Nippon Life will look for more potential acquisitions in Europe and across Asia-Pacific, adding there were fewer opportunities in those regions than in the US.
In 2016, Nippon Life bought National Australia Bank Ltd.’s life insurance unit for around $1.5 billion. However, the Japanese company was forced to make multiple capital infusions to support the unit after suffering losses following the acquisition.
Kimura added that securing qualified personnel will be Nippon Life’s new challenge as it pursues overseas expansion.
“We are a very domestic company. We will boost human resources necessary for global businesses, like by hiring outside talent, including non-Japanese people,” he said.
