Tokio Marine to Use Citic to Grow in China After U.S. Foray

Updated on
Tsuyoshi Nagano
Tokio Marine Holdings Inc. President Tsuyoshi Nagano. Photographer: Kiyoshi Ota/Bloomberg

Tokio Marine Holdings Inc., fresh from its biggest acquisition in the U.S., is now looking for opportunities in China.

The insurer plans to utilize its ties with Citic Group Corp., China’s biggest conglomerate, to expand in the country, Tsuyoshi Nagano, Tokio Marine’s president and chief executive officer, said in an interview Friday in Tokyo. The company last year invested HK$780 million ($101 million) in Citic Ltd., the Hong Kong-listed arm of Citic Group.

“We are currently considering ways to expand in China,” said Nagano. “With Citic, we would like to jointly invest in good companies and then start insurance businesses together.”

The insurer agreed in June to buy Houston, Texas-based HCC Insurance Holdings Inc. for about $7.5 billion in the biggest acquisition by a Japanese insurance company, stepping up an overseas expansion to counter stagnation at home.

Tokio Marine plans to accelerate its non-life business development in China by using Citic’s expertise and connections to select local companies to invest in, Nagano said.

Its shares rose to the highest since June 2007, gaining 3 percent to 5,342 yen. They have risen 36 percent this year, compared with an 18 percent gain in the Topix index.

Asian Markets

Other than China, Tokyo-based Tokio Marine is also looking to expand in emerging markets in Asia including Indonesia, Thailand, the Philippines and India by working with local banks and others to sell insurance policies, Nagano said. It is also seeking opportunities in South American markets such as Brazil and Mexico, he said.

Japanese insurers have been lured by growth in Southeast Asia as they grapple with an aging society and shrinking population at home. Sumitomo Life Insurance Co. agreed in December 2013 to buy a stake in PT Bank Negara Indonesia’s life insurance unit, while Dai-ichi Life Insurance Co. the same year purchased a stake in PT Panin Financial Tbk’s life unit.

Tokio Marine may borrow in dollars and has no plans to sell shares to fund the HCC acquisition, which will be completed in November, Nagano said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE