Tokio Marine to Acquire US Insurer Pure Group for $3.1 billon

Robert Cieslak

Tokio Marine will buy U.S. insurance company Pure Group for $3.1 billion. The move is in line with Tokio Marines’ long-term plans to Expand its business to emerging markets and high growth markets of United States.

Tokio Marine Holdings has confirmed to buy U.S. specialty insurance company Pure Group along with its parent company Privilege Underwriters inc., a high net worth insurer for $3.1 billion. If it happens the acquisition will be Tokio Marine Holdings’ fourth largest deal in United States in a decade.

Japanese Financial firms are looking abroad for its growth because of shrinking population in Japan. So the latest move is in sequence to Tokio Group’s expansion to emerging markets and high growth markets of United States.

“The U.S. market is huge and it is expected to grow steadily,” Satoru Komiya CEO Tokio Marine said in a statement. Komiya claimed the $3.1 billion price is not cheap as its 33-times of Pure Group’s profit forecast for 2020.  

Satoru Komiya also stated; “This deal is highly complementary, and it is consistent with our merger and acquisition strategy.”

However, Tokio Marine said Pure Group is among top three players in market of United States. It provides services related to property and casualty insurance to high net-worth individuals in U.S.

Pure Group its business is composed of 57% homeowners, 23% auto and 9% inland marine.

World’s fourth largest property and casualty insurer by revenue Tokio Marine is not new in acquiring U.S. companies. It has already spent over $15 billion on three big US acquisitions including US Specialty insurer HCC Insurance Holdings for $7.5 billion in 2015, Delphi Financial for $2.7 billion in 2011 and Philadelphia Insurance for $4.7 billion in 2008.

The acquisition will take place via Tokio Marine’s subsidiary Insurance Holdings. The deal will close during first quarter of 2020.  Tokio will finance the acquisition through cash-on-hand and external funding and it aims to keep its current management in place following the acquisition.

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