Japan-based Nippon Life Insurance is reportedly mulling acquisitions in developed and emerging markets, including asset managers in the US to diversify its sources of income.
The move comes as Japanese life insurers face diminishing returns from Japanese government bond (JGB) investment and weak prospects in their mainstay death benefit insurance sales.
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Additionally, Nippon Life is also planning to strengthen its small global asset management business through acquisitions, with a particular focus on small, boutique-type asset managers in the US specializing in particular asset classes.
Nippon Life President Yoshinobu Tsutsui told Reuters in an interview: "We don’t limit (acquisition targets) to particular geographic areas. We will have geographic diversity.
"There are many unique asset management companies in the United States, small but unique. We are thinking about these firms. I don’t think we have a shot at huge ones," he added.
As part of a three-year business plan, Nippon Life said last month that it set aside up to JPY1.5trn ($12.4bn) for investment and acquisitions at home and abroad over the next 10 years, to boost earnings outside its domestic insurance base by 10 times over the next decade.
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By GlobalData"We would like to be in a different phase in the next three years. We are trying to make a shift in our portfolio from one dependent on JGBs to one which is not," Tsutsui added.
Tsutsui said that life insurer, which has an investment portfolio some JPY60trn in size, also aims to increase investment in foreign bonds this financial year. He added that the company is looking to acquire majority stakes based on the targets.
