Meiji Yasuda Life has purchased the US protection business of UK insurer Legal & General, including its subsidiary Banner Life, and the firm’s US pension risk transfer unit, in a $2.3bn deal, which represents the second major acquisition by a Japanese life firm in the space of three months.
As part of the deal, Meiji Yasuda will acquire a 5% shareholding in L&G itself and the move is part of the Japanese firm’s, ‘My Mutual Way Phase II’, plan, which aims to expand the firm’s market share and asset management business and enhance its overseas insurance operations.
Meiji Yasuda’s announcement comes just three months after Japan’s largest life insurer by asset under management, Nippo Life, bought Bermuda-headquartered back book specialist Resolution for US$8.2bn
According to analysts at Credit Sights, a research arm of Fitch, the deal will double Meiji Yasuda’s overseas insurance premiums to over JPY1tn (approx. US$6.58bn), while core profits are expected to exceed JPY100bn, up from JPY91.4 bn pre-acquisition.
As part of its strategic plan, Meiji Yasuda is aiming to achieve JPY1.75tn in overseas premiums and JPY170 bn in core profits by 2030. Credit Sights said that if it were successful this would increase Meiji Yasuda’s overseas business share to about 35% of total premiums.
Credit Sights added that the latest deal by Meiji Yasuda was part of a strategic move by the Japanese insurance sector to expand its international holdings. ‘Recent overseas spending by Meiji Yasuda includes deals with Allstate and Elevance in 2024; this intensifies overseas M&A competition among Japanese life insurers, following Nippon Life’s $8.2 bn acquisition of Resolution Life,” Credit Sights said.
Analysts at Fitch’s rating agency division were positive about the deal, saying it would enable greater geographic diversity for the Japanese insurer.
“Fitch expects the deal to have a positive impact on Meiji Yasuda Life’s credit profile, taking into account Banner Life’s strong position in the steadily expanding US individual life insurance market and pension risk transfer business, as well as better global diversification of the Meiji Yasuda Life group.
Fitch expects the impact on Meiji Yasuda Life’s capital adequacy and financial leverage to be minimal and manageable,” the ratings agency said in a note.
