Tokio Marine Holdings (TMHD) has entered into a strategic partnership with National Indemnity Company (NICO), a reinsurance unit of Berkshire Hathaway.
The partnership includes an equity investment in TMHD, collaboration in reinsurance and potential joint activity in mergers and acquisitions.
The partnership comprises three key elements:
- Strategic equity investment in TMHD
NICO will acquire an initial stake of about 2.5% in Tokio Marine Holdings (TMHD) through the purchase of treasury shares. To offset dilution, TMHD will conduct a share buyback of up to JPY287.4bn ($1.9-2bn)
Any further share purchases by NICO are expected to be made on the open market. NICO will not increase its stake beyond 9.9% without prior approval from TMHD’s board.
The investment reflects a long-term strategic alignment between the two parties.
- Collaboration in reinsurance
TMHD will add NICO to its reinsurance panel, with NICO assuming part of its portfolio through a whole account quota share (WAQS) arrangement.
This is expected to strengthen the group’s reinsurance base, making it more stable and less exposed to market cycles, while reducing earnings volatility, particularly from Nat CAT risks. The WAQS structure may expand over time as the partnership develops.
The additional risk capacity is expected to support growth initiatives, especially in the core insurance business.
For NICO, the arrangement provides access to a diversified global insurance portfolio, supported by Tokio Marine’s underwriting capabilities and risk selection.
- Strategic collaboration in M&A and Global investment opportunities
The two companies will collaborate on global investment opportunities, including mergers and acquisitions, and may pursue joint investments to support growth.
The partnership combines Tokio Marine’s M&A experience with NICO’s capital resources, expanding access to potential acquisition opportunities.
“This strategic partnership represents a major step forward in advancing our insurance business and delivering sustainable value creation by combining the strengths of both organisations,” TMHD Group CEO Masahiro Koike said in a statement.
Berkshire Hathaway-Insurance Operations Vice Chairman Ajit Jain said, “We expect this strategic partnership to create compelling long-term opportunities for both organisations.”