3 October 2019Insurance

Tokio Marine Holdings to buy US HNW insurer Pure Group for $3.1bn

Tokio Marine Holdings has agreed to buy 100 percent of the outstanding shares of US firm Privilege Underwriters and its subsidiaries, known as the Pure Group, for $3.1 billion (approximately ¥ 325.5 billion).

The insurance group specialises in the US P&C high net worth (HNW) insurance market and will be acquired by Tokio Marine’s wholly owned subsidiary, HCC Insurance Holdings.

The global insurer expects to complete the purchase between January and March in 2020, subject to regulatory approvals.

Tokio Marine said that since Pure Group was established in 2006, it has achieved rapid growth in excess of the general US P&C insurance market to become one of the top three HNW specialists.

It said the purchase of the Pure Group “will contribute to sustainable profit growth and capital efficiency of Tokio Marine through Pure Group’s continued high growth potential in the world’s largest P&C insurance market, as well as its stable fee-based business and low capital intensity”.

Pure Group’s business has limited overlap with Tokio Marine’s existing US business, the global insurer said, and the expansion into this niche specialty business complements and further diversifies Tokio Marine’s business portfolio in terms of revenues, profits and customer segments.

This latest acquisition is part of the global group’s efforts to expand the scale and profitability of its international business as the key growth driver for the overall group. “We have been pursuing organic and strategic M&A initiatives in both developed and emerging markets in order to capture growth opportunities in the global insurance market and to build a further diversified business portfolio,” Tokio Marine said.

It follows the acquisitions of Kiln Ltd, Philadelphia Consolidated Holdings Corp, Delphi Financial Group, Inc. and HCC Insurance Holdings, Inc, which have all been agreed in the years since 2008.

Tokio Marine said: “We have also been actively seeking growth opportunities in emerging markets where we expect to see attractive mid-to-long term growth as seen in our recent acquisition of Insurance Australia Group Limited’s P&C business in Thailand and Indonesia as well as our minority investment in Hollard Group which engages in both life and P&C business in South Africa and other Sub-Saharan countries.”

The global insurer also said it had acted to align its business portfolio with the current global business environment and its business strategy, which is demonstrated by the divestment of its reinsurance business Tokio Millennium Re in March 2019. This was done to enable the firm to focus on its core strategy of expanding profitable and stable primary insurance business, notably specialty insurance, it added.

Get all the latest re/insurance industry news with our daily newsletter -  sign up here.

Insurance sector sees strong business performance: CBI/PwC

Private equity must up their game on quality of D&O insurance, finds research

AXA XL launches on-demand cover for UK Uber drivers

Global re/insurance outsourcing and consulting rebrands its MGA as part of expansion strategy

Ed Risk Solutions bags director from Price Forbes Risk Solutions

Feature:  10 ways insurers are using insurtech to drive new business

Already registered?

Login to your account

To request a FREE 2-week trial subscription, please signup.
NOTE - this can take up to 48hrs to be approved.

Two Weeks Free Trial

For multi-user price options, or to check if your company has an existing subscription that we can add you to for FREE, please email Elliot Field at efield@newtonmedia.co.uk or Adrian Tapping at atapping@newtonmedia.co.uk


More on this story

Insurance
21 August 2019   Japanese property and casualty insurance group Tokio Marine Holdings has partnered with Singapore based Plug and Play's insurtech program.
Insurance
26 July 2019   Specialty insurance group Tokio Marine HCC has formed a new Mexican subsidiary to further expand its international surety operations.
Insurance
10 October 2019   Specialty insurance group Tokio Marine HCC has appointed Sharon Brock and Tom Weist as co-chief financial officers, replacing Brad Irick who has been named the next group chief executive officer of Tokio Marine Kiln (TMK).