Millea Holdings Inc., Japan's largest insurer, said Friday its unit Tokio Marine & Nichido Fire Insurance Co. will buy Lloyd's of London insurer Kiln Ltd. for ¥106 billion in cash, or 150 pence per share.
Kiln, which provides energy, marine, property and aviation coverage, plans to reduce underwriting in the London market next year amid more competition and falling prices. Property and casualty insurers have retrenched amid declining premiums following last year's benign storm season.
Kiln is the second Lloyd's insurer to receive takeover interest in the last week. Bermuda-based Ironsure Inc. said Dec. 6 that it approached Heritage Underwriting Agency PLC about a potential cash offer.
Kiln's pretax profit, the figure followed most closely by U.K. insurance analysts, declined 14 percent to £20.8 million in the first half.
Millea shares dropped 4.5 percent to ¥3,590 Friday on the Tokyo Stock Exchange, the lowest since October 2005. The stock has declined 15 percent this year, compared with an 11 percent drop by the benchmark Topix index.