MSI to acquire First Capital Insurance

Mitsui Sumitomo Insurance Company (MSI) is acquiring Singapore’s First Capital Insurance for USD1.6 billion from Canada’s Fairfax Financial Holdings, in the biggest takeover by a Japanese insurer in populous Southeast Asia – a key target region for global players.

Japanese insurance firms have been aggressively expanding globally. In the last two years, the insurers have struck multibillion dollar deals, especially in the United States.

In a statement, MSI, the core firm of MS&AD Insurance Group Holdings, said it is paying 3.3 times book value for First Capital, Singapore’s largest property and casualty insurer. “A review of key recent M&A deals suggests that Japanese insurers tend to invest in highly rated, niche companies that command leading positions in mature markets,” said Soichiro Makimoto, senior analyst from the financial institutions group at Moody’s Japan K.K to Reuters.

The deal will help MSI to affirm its position as the biggest operator in the region, with business in 10 markets within the Association of Southeast Asian Nations. This new move will also pave the road for new business opportunities from the Singapore corporate and retail market as well as other Asian countries.