Over the past decade, several major Japanese life insurers have been seeking growth opportunities overseas, particularly in the US, mainly due to the maturity of the domestic market, said Fitch Ratings.
Fitch believes that these acquisitions will be beneficial for Japanese life insurers, potentially boosting their earnings amid the US's steady population growth. The ratings company views this acquisition of US life insurers favourably, reflecting Japanese life insurers' strong credit quality, ample capital, long-term investment horizon and willingness to support growth.
The Dai-ichi Life’s acquisition of US-based Protective Life Corporation in 2014 was the first significant instance, which was closely followed in 2015 by Meiji Yasuda Life Insurance Company’s purchase of Stancorp Financial Group and Sumitomo Life Insurance Company’s acquisition of Symetra Financial Corporation. T&D Life Group, a quasi-major life insurance group in Japan, acquired a 25% stake in Fortitude Group Holdings in 2020. In December 2024, Nippon Life Insurance Company, bought a 21.6% stake in Corebridge Financial. Nippon Life also announced the acquisition of Resolution Life Group Holdings in 2024, marking the full entry of all four major Japanese life insurers into the North American market. Meiji Yasuda Life announced the acquisition of Legal & General America in February 2025.
Fitch expects Japanese life insurance companies’ pursuit of overseas M&A, particularly the acquisition of US life insurers, to continue. Currently, the North American business contributes nearly 20% to Japanese major life insurers' overall business, with more than 70% of group operations still based in Japan.
Nevertheless, risks to the successful US expansion of major Japanese life insurers include heightened volatility, elevated inflation, and challenges to GDP growth. Japanese life insurance groups could be adversely affected if the US life insurance sector faces a crisis, such as in the real estate market or private credit. If the proportion of North American operations increases significantly in the future, the associated risks could have a stronger impact on the creditworthiness of major Japanese life insurance groups.