Tokio Marine has agreed to buy US insurance group Pure Group for $3.1bn, as the fourth-largest property and casualty insurer globally continues with its merger and acquisition strategy.
The White Plains, New York-based Pure Group, with $1bn in managed premiums last year, has expanded to become one of the top three specialist insurers in the growing US market for high net worth individuals, according to the Japanese company. It is currently majority-owned by private equity groups KKR and Stone Point.
"This deal is highly complementary, and it is consistent with our merger and acquisition strategy," Satoru Komiya, Tokio Marine's chief executive, said.
This deal is highly complementary, and it is consistent with our merger and acquisition strategy"
Tokio Marine Group said the deal will allow it to further expand and diversify its international business in both scale and profit. The insurer said there is limited overlap and that Pure's business is highly complementary with its own.
The insurer said that it has plans to create synergies with Pure Group under its umbrella by providing reinsurance to Pure Group to increase its capacity and retain profit within Tokio Marine Group and cross-selling of specialty insurance products developed by its existing U.S. group companies to Pure Group customers.
In addition to the acquisition of Pure Group, Tokio Marine also acquired Insurance Australia Group Limited's P&C business in Thailand and Indonesia as part of its active pursuit of growth opportunities in emerging markets.
Ross Buchmueller, CEO and founder of the PURE Group, will continue to lead the organization as an independent operating unit within the Tokio Marine Group.
The transaction, which is subject to regulatory approvals and other customary closing conditions, is expected to close in the first quarter of 2020.