Japan's MS&AD Insurance Group Holdings has agreed to invest GBP800 million (US$1.05 billion) to take a stake of up to 15% in UK-based ReAssure Jersey One, a unit of Swiss Re.
MS&AD said it would initially buy 5% of ReAssure from Swiss Re for GBP175 million in cash, aiming to close the transaction in the first quarter of 2018, pending regulatory approval. MS&AD will raise the stake to 15% by 2020 . This would be completed within three years from the closing of the initial purchase.
ReAssure deals mainly in closed-book life business, in which operators purchase existing policies from life insurers instead of selling policies themselves. MS&AD said that by taking a stake in unlisted ReAssure it aimed to build know-how of the closed-book life business.
MS&AD and other Japanese property and casualty insurers have been aggressively acquiring and investing in overseas assets as they seek to diversity their risk portfolio. ReAssure represents MS&AD's first big investment in Europe.