Sompo Japan Insurance Inc., a unit of the nation's third-largest casualty insurer group by market value, is considering buying Britain's Canopius Group Ltd. as it continues an overseas expansion.
Sompo Japan plans to acquire Canopius for about ¥100 billion, sources said Sunday. They said Sompo and Canopius are expected to reach an agreement on the deal as early as this week. Sompo plans to buy all Canopius shares by the end of next year.
Meanwhile, parent NKSJ Holdings Inc. said in a statement on Sunday, without giving further details, the acquisition is under review, and no decision has been made.
This would be NKSJ's first foreign acquisition since June, when it paid the equivalent of ¥9 billion to make Brazil's Maritima Seguros SA a consolidated subsidiary, according to data compiled by Bloomberg. Overseas operations last fiscal year contributed 6.2 percent of the group's property and casualty net premiums, data on NKSJ's website show.
NKSJ last month more than doubled its profit forecast to ¥72 billion for the full year ending March 31, a 65 percent increase from the previous fiscal period and the most since Sompo Japan and Nipponkoa Insurance Co. combined under the holding company three years ago, data compiled by Bloomberg show. Overseas subsidiaries accounted for 6.5 billion of the group's ¥29.1 billion net income in the six months to Sept. 30, compared with ¥19.9 billion from Sompo Japan and Nipponkoa, NKSJ said in a statement on Nov. 19.
Canopius employs about 560 people with operations in the U.K., Ireland, Switzerland, the U.S., Singapore and Australia offering property, casualty, marine, energy, and specialty insurance, according to a fact sheet on its website. Gross written premiums totaled ￡692 million ($1.1 billion) in 2012, the data show.