Tokio Marine to buy Pure

TOKYO: Tokio Marine Holdings Inc said yesterday that it would buy insurer Pure Group for about $3.1 billion, marking its fourth sizeable acquisition in the United States in a little over a decade.

Japanese financial firms have been forced to look abroad for growth amid an ageing, shrinking population at home.

Tokio Marine, the world’s fourthlargest property-and-casualty insurer by revenue, has pushed into both emerging markets and the US.

“The US market is huge and it is expected to grow steadily,” Tokio Marine chief executive Satoru Komiya told a news conference. “Also, the market is transparent.”

But he acknowledged that the $3.1 billion price, at 33-times Pure Group’s forecast profit for 2020, was “not cheap”.

“We are paying for Pure’s big potential growth,” Komiya said.

The deal, to be financed through cash on hand and external funding, is expected to close during the first quarter of 2020 and Tokio Marine will keep Pure Group’s current management in place.

Pure Group provides property-andcasualty insurance to high net-worth individuals across the US and has become one of the top three players in that market since its founding in 2006.

Pure has achieved a compound annual growth rate of around 30% in the last five years and reached around $1 billion in managed premiums in 2018.

Tokio Marine is valued at $38 billion and brings in $45 billion a year in revenue, according to Refinitiv data.

Shares of the insurer ended 1.8% lower after the Nikkei newspaper earlier reported the news.