JAPAN INSURER BUYS SINGAPORE'S FIRST CAPITAL

SINGAPORE: Mitsui Sumitomo Insurance Co (MSI) is buying Singapore’s First Capital Insurance for US$1.6 billion (RM6.85 billion) from Canada’s Fairfax Financial Holdings in the biggest takeover by a Japanese insurer in populous Southeast Asia.

Starved of growth in their ageing home market, Japanese insurance firms have been aggressively expanding globally.

In the last two years, the insurers have struck multibillion dollar deals, especially in the United States.

MSI, the core firm of MS&AD Insurance Group Holdings, is paying 3.3 times book value for First Capital, the largest property and casualty insurer, here.

The deal will help MSI, which operates in all 10 markets of the Association of Southeast Asian Nations, cement its position as the No. 1 in the region.

With the acquisition, “we can expect new business opportunities in the local corporate and retail market, here, as well as other Asian countries”, said MSI in a statement yesterday.

The purchase is a pricey one, though, with property and casualty insurance companies globally listed under the Thomson Reuters classification trading at an average 1.65 times book.

Japan’s cashed-up insurers have been paying top dollar as they seek to spur growth and overcome negative interest rates, fewer lucrative investment options and a fast-maturing market at home. Reuters