Japanese financial firms have been forced to look abroad for growth amid an ageing, shrinking population at home. Tokio Marine, the world’s fourth-largest property-and-casualty insurer by revenue, has pushed into both emerging markets and the United States.
“The U.S. market is huge and it is expected to grow steadily,” Tokio Marine Chief Executive Satoru Komiya told. “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,” he 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, Tokio Marine said in a statement.
Pure Group provides insurance to high net-worth individuals across the United States and has become one of the top three players in that market since its founding in 2006, Tokio Marine said.