Further expanding its ties with US
insurer Northwestern Mutual, Nippon Life, Japan’s biggest life
insurer, has invested $250m in 30-year surplus notes issued by the
mutual insurer.

The notes bought by Nippon Life formed part of
a total issue of $1.75bn. Surplus notes are a subordinated debt
instrument usually, but not exclusively, issued by mutual

Nippon Life and Northwestern first established
ties in July 2008 to assist each other in pursuing investment
opportunities in their respective home countries. At the time,
Nippon Life also acquired a 5% equity stake in Russell Investments,
a Northwestern unit.

Purchase of the surplus notes follows Nippon
Life’s purchase in September 2009 of a $500m 10-year exchangeable
surplus note issued by Prudential Insurance Company of America, a
unit of Prudential Financial.

Under terms of the transaction, Nippon Life can
exchange the note for Prudential Financial ordinary shares after
five years. Nippon Life already has a stake of about 0.6% in
Prudential Financial.

In the US, Nippon Life also holds a 7% stake in
financial conglomerate Principal Financial Group and operates
directly in the US via health insurance unit, Nippon Life