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Dai-ichi Life, Sumitomo Life top Japanese insurers for APAC M&A

Sumitomo Life Insurance Co. and Dai-ichi Life Holdings Inc. participated in the largest Asia-Pacific deals involving Japanese insurers over the past three years, according to an S&P Global Market Intelligence analysis.

The largest of the deals was the $1.92 billion acquisition of a 75% stake in Aviva PLC's Singapore business by an investor group including Sumitomo Life. Sumitomo took a 20% stake in the entity which has since rebranded as Singlife Financial Pte. Ltd., according to reports. The new company received an additional $238.1 million investment from Sumitomo Life.

Dai-ichi Life snapped up New Zealand's Partners Life Ltd. and Japan's ipet Holdings Inc. for $630.8 million and $277.8 million apiece in the second half of 2022. These transactions were the second- and third-largest deals involving Japanese insurance companies announced between July 31, 2020, and July 31, 2023, where the targeted insurance broker or underwriter was in the Asia-Pacific region.

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Investor preferences

Tokio Marine Holdings Inc. invested in the region, but did not become an outright acquirer. Tokio Marine & Nichido Fire Insurance Co. Ltd. is providing fresh funding to Tokio Marine Newa Insurance Co. Ltd. in a recently announced private placement. Tokio Marine also led a $196.0 million series B funding round by insurtech Bolttech Management Ltd.

"Because of high valuations, we have to remain patient with large-scale M&A," Tokio Marine CEO Satoru Komiya said during a May conference, adding that the company "will definitely pursue" bolt-on M&A.

Tokio Marine is preparing to launch a sale process for its $1 billion Southeast Asian life insurance business, Reuters reported in June, citing sources.

A spokesman declined to comment on the report but said "we won't make any change" to the company's M&A strategy.

"Tokio Marine has always been selective and focused in its business areas," Koichi Niwa, an analyst at Citigroup Global Markets Japan, said in an email to S&P Global Market Intelligence. "If the news reports are correct, Tokio Marine probably does not consider the Asian life insurance business to be an area of focus for the company at this time."

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Nippon Life Insurance Co. was the lead investor in a $402.6 million private placement by Australia-based MLC Ltd. Mitsui Sumitomo Insurance Co. Ltd. and also sold 5.17% of Max Life Insurance Co. Ltd. to Max Financial Services Ltd. in a $103.0 million deal.

"Among listed Japanese insurers, Dai-ichi Life and MS&AD are interested in external growth of life insurance in East Asia," Niwa said. "This is based on the company's management policy."