Japan insurer Tokio Marine eyes more acquisitions in U.S., Mexico

By Taiga Uranaka

TOKYO | Sun Jul 28, 2013 6:03pm BST

TOKYO (Reuters) - Tokio Marine Holdings Inc (8766.T) is seeking acquisitions in the United States and Mexico to spread out its risk, the CEO of Japan's largest property-casualty insurer by market value said, as rivals go after growth closer to home in Southeast Asia.

With sizable business in Britain and North America, Tokio Marine is currently the most geographically diverse Japanese insurer. CEO and President Tsuyoshi Nagano told Reuters Tokio Marine was keen to further expand abroad to diversify its risk, rather than to offset weak growth prospects at home.

"Some say we have relatively big concentration of risk exposure to North America, but we can achieve risk diversification within the region," Nagano said in an interview.

"There are many potential candidates. There are many niche and boutique-style property and casualty insurers in the United States, and we can choose such companies for risk diversification," he added, declining to give any names.

The company is also eyeing Mexico as a market of vast potential, Nagano said, adding that Tokio Marine's current operations in the country only generate about $20 million (13 million pounds) in annual premium revenue.

"There is a limit to what we can do in an organic way. We are considering options including M&A," he added.

FEW ASIAN M&A TARGETS

Nagano, 60, took over in June from Shuzo Sumi, who in his six-year tenure acquired several overseas firms including U.S. insurer Philadelphia Consolidated for $4.7 billion deal and Lloyd's of London insurer Kiln for $671 million.

Nagano himself led the talks to buy U.S. insurer Delphi for about $2.7 billion in 2011, when he was a senior executive.

Tokio Marine is on track to boost revenues from its overseas operations to $10 billion for the next financial year, which ends in March 2015, from about $7.3 billion in the 2012/13 financial year which ended this March, Nagano said.

"These targets are figures for organic growth. And we are on track to achieve them," he said.

In Southeast Asia, where several other Japanese insurers have been snapping up assets, Tokio Marine is likely to build up the business it currently has rather than go after what Nagano called over-valued assets.

"Indonesia is a large market. But it's hard to obtain good assets for reasonable prices. We have to make it big in an organic way," he said.

Dai-ichi Life Insurance Co Ltd (8750.T) said last month it has agreed to buy a 40 percent stake in Indonesia's Panin Life for 3.3 trillion rupiah ($336.5 million).

Last week, Meiji Yasuda Life Insurance Co has agreed to pay about $700 million to buy a 15 percent stake Thai Life Insurance Insurance Co.

($1 = 100.1650 Japanese yen)

(Editing by Miral Fahmy)

Source: http://feeds.reuters.com/~r/Reuters/UKBusinessNews/~3/SUHQphtWkJ4/story01.htm

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