Nomura Securities Co. and Daiwa Securities Group Inc. plan to invest 180 billion yen in Nippon Life Insurance Co. to help the insurer beef up its capital base, sources familiar with the deal said Thursday.
The plan is in the final stage of negotiations and is expected to be carried out as early as this fall, the sources said.
Nippon Life, the largest life insurer in Japan, would be the first Japanese life insurance firm to boost its capital base with the help of brokerages.
Under the plan, Nomura would provide Nippon Life with 100 billion yen in funds, while Daiwa will contribute 80 billion yen.
Nomura and Daiwa will transfer the claims against Nippon Life to a special-purpose company, which in turn will securitize them for sale to institutional investors through Nomura and Daiwa.
If the plan goes smoothly, Nippon Life’s capital will rise to 600 billion yen from 420 billion yen.
Most Japanese life insurance companies, including Nippon Life, are owned by policyholders, instead of shareholders, and depend on borrowings from financial institutions to increase their capital base. The new scheme will allow them to raise funds from a variety of investors.