Tokio Marine to buy 98.6% of Aus firm

Japan’s Tokio Marine Holdings Inc has entered into an agreement to buy a 98.6% stake in Safety Insurance from Insurance Australia Group Ltd as part of its A$525-million (12.7-billion-baht) budget for acquisitions.

Under the deals, Tokio Marine will also acquire a 80% stake in PT Asuransi Parolamas in Indonesia from the Australian insurer, said president and group chief executive Tsuyoshi Nagano.

Tokio Marine Group has been focused on a merger and acquisition strategy in both developed and emerging markets as the driving force of its growth, Mr Nagano said.

“With respect to Asia and other emerging markets, its present contribution to the total profit of our international business remains at 10%,” he said. “We aspire to significantly expand our business in these markets with high growth potential through acceleration of our strategic M&A initiatives to achieve further diversification of our global portfolio, which is stated as one of the key initiatives of our current MidTerm Business Plan, ‘To Be a Good Company 2020’, announced in May.”

The integration of Safety Insurance and Tokio Marine Insurance Thailand (TMITH), in which the Japanese insurance group holds 99.96%, will create the thirdlargest property and casualty insurer with 8% market share — the largest among the foreign-owned insurers — and the secondlargest motor insurer in Thailand, which is the largest P&C insurance market among Southeast Asian countries, Mr Nagano said.

Thai General Insurance Association data put Safety Insurance’s premiums at 8.99 billion baht last year, representing 4.1% of the country’s non-life insurance premiums, while Tokio Marine Insurance Thailand’s premiums were 7.81 billion baht, accounting for 3.6% of the market.

Safety Insurance’s business portfolio complements TMITH existing business, whose core strength is in commercial lines. The combination of the two operations will enable Tokio Marine Group to offer myriad products and services that meet the needs of a wide range of clients in both the personal and commercial sectors, Mr Nagano said.

“Various synergies are set to be generated through initiatives such as cross-selling Tokio Marine group companies’ speciality insurance products through Safety Insurance’s nationwide distribution channels,” he said.