Japan Life Insurers Eye US Acquisitions for Growth
Japanese life insurers are increasingly looking to the US market for growth opportunities, driven by the maturity of their domestic market, according to a report by Fitch Ratings. The ratings agency views these acquisitions favorably, citing the strong credit quality, ample capital, and long-term investment horizon of Japanese life insurers.
Over the past decade, several major Japanese life insurers have made significant acquisitions in the US. Dai-ichi Life’s acquisition of Protective Life Corporation in 2014 marked the beginning of this trend, followed by Meiji Yasuda Life Insurance Company’s purchase of Stancorp Financial Group and Sumitomo Life Insurance Company’s acquisition of Symetra Financial Corporation in 2015. More recently, Nippon Life Insurance Company acquired a 21.6% stake in Corebridge Financial in December 2024, and Meiji Yasuda Life announced the acquisition of Legal & General America in February 2025.
These acquisitions are expected to boost earnings for Japanese life insurers, driven by the US’s steady population growth. Currently, the North American business contributes nearly 20% to Japanese major life insurers’ overall business, with more than 70% of their operations still based in Japan. Fitch expects Japanese life insurance companies to continue pursuing overseas M&A, particularly in the US.
However, there are risks associated with this expansion, including heightened volatility, elevated inflation, and challenges to GDP growth. If the US life insurance sector faces a crisis, such as in the real estate market or private credit, Japanese life insurance groups could be adversely affected. As the proportion of North American operations increases, these risks could have a more significant impact on their creditworthiness.
The trend of Japanese life insurers expanding into the US market is likely to continue, driven by their strong financial position and the growth potential of the US market. However, the associated risks will need to be carefully managed to ensure the success of these acquisitions.
