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 Japan¡¯s 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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