Japanese insurance major Tokio Marine has agreed to purchase American counterpart Privilege Underwriters in a transaction valued at approximately $3.1bn.

The Japanese insurance giant is buying stakes from private equity firms Stone Point Capital and KKR.

Privilege Underwriters, which underwrite businesses through the PURE Group of Insurance Companies (PURE Group), includes PURE Risk Management, PURE Insurance Company, PURE Programs, and Haven Art Group.

After acquisition, these entities will operate as wholly owned subsidiaries of HCC Insurance Holdings, which Tokio Marine acquired for $7.5bn in 2015.

The PURE Group offers specialised insurance coverages including property and casualty insurance to high net-worth individuals across the US.

The company is licensed to offer insurance products across 49 US states and the District of Columbia.

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By GlobalData

Tokio Marine senior managing executive officer and co-head of international business Chris Williams said: “The PURE Group’s member-owned model is unique and forges an alignment of interests focused on delivering a sophisticated insurance solution to carefully selected individuals.

“This acquisition provides unique growth opportunities and portfolio diversification for the Tokio Marine Group. We look forward to welcoming the PURE Group’s management team and employees to Tokio Marine and to helping them continue to grow this business post-transaction.”

The deal, which is subject to regulatory approvals, is scheduled to be completed in the first quarter of next year.

Tokio Marine has been boosting its overseas business to diversify its revenue and risk amid saturating domestic insurance market.

Tokio Marine also acquired Delphi Financial for $2.7bn in 2011 and bought Philadelphia Consolidated for $4.7bn in 2008.