Mitsui Sumitomo Insurance is looking to buy American reinsurance intermediary Transverse Insurance Group for around $400m, Nikkei has reported.
The Japanese insurer could pay up to an additional $150m for Transverse depending on the firm’s earnings after the deal.
Mitsui Sumitomo Insurance, a subsidiary of MS&AD Insurance Group Holdings, is considering the purchase of Transverse’s stake from an investment fund and others and plans to convert it into a wholly owned subsidiary as early as this year.
The business daily said that the Japanese property insurance major aims to gain know-how of the reinsurance space through the deal, which could be used to expand in specialised markets such as cybercrime.
Founded in 2018, Transverse is based in New Jersey and serves as a reinsurance broker across the US.
The broker has been expanding in the US for several years and receives around 5% of the insurance premium as its commission for connecting insurers with reinsurers.
Although, Mitsui Sumitomo Insurance is focused on the Asian insurance market, it seeks to bolster its presence in the US market, which is regarded as the top property insurance market.
According to MS&AD’s mid-term business plan till 2025, the insurance holding company is looking to increase its annual property from foreign markets to JPY125bn.
Transverse’s acquisition is anticipated to add up to JPY10bn to the group’s earnings.
MS&AD said it is looking for business investment opportunities, but a final decision is yet to be made, a Reuters report said. In June this year, Mitsui Sumitomo Insurance joined forces with AI-based insurance pricing solution Akur8.