Nippon Life Insurance is studying further acquisition opportunities abroad after spending more than $12 billion on a string of deals a year ago, the company’s top executive has said.
“Our overseas business division is always looking at a long list of potential targets,” particularly in the U.S., said Satoshi Asahi, president of 91AV原创 largest life insurer. “It’s the biggest market,” he said in an interview, while adding that his company has no imminent deals to announce.
Japanese financial firms have been aggressively making acquisitions abroad to make up for a lack of growth prospects at home. Nippon Life made more than $12 billion of deals in December last year, including the purchase of Bermuda-based Resolution Life Group Holdings for about $8.2 billion.
Asahi also spoke about rising interest rates in Japan, which are eroding the value of the unlisted insurer’s government bond holdings.
“It might not be perfectly sound to have paper losses in our portfolio from a risk management perspective,” he said.
Japanese government bonds have sunk this year as the central bank tightened monetary policy and concerns mounted over fiscal discipline. Yields on 10-year notes climbed to the highest since 1999 last week after the central bank raised interest rates.
Nippon Life’s unrealized losses on domestic bonds swelled to ?4.7 trillion ($30 billion) at the end of September, from ?3.6 trillion six months earlier. The insurer has been selling some JGBs at a loss to replace them with higher-yielding notes.
“We need to carefully monitor the situation and take action because if superlong yields jump, there will be actual losses,” Asahi said.
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