Tokio Marine attacks emerging markets with acquisition

Japanese insurance giant Tokio Marine & Nichido Fire Insurance's acquisition of most of ABM Amro's Brazilian insurance operations forms part of a strategy to attack fast-growing emerging markets, Brazilian financial daily Valor Econômico quoted a Tokio Marine source as saying. Dutch banking giant ABN Amro (NYSE: ABN) announced on Thursday that Tokio Marine would pay 897mn reais (US$355mn) for ABN Amro Brazil's P&C subsidiary and 50% of its life & pension unit. Tokio Marine's parent Millea Holdings already controls some 27% of the Japanese insurance market and last year it concluded that emerging markets represented the best alternative to ensure strong growth for the group, the source said. The Brazilian market has been singled out together with China and India as the priority markets outside Japan for Tokio Marine's future growth, the source said. Under the deal with ABN Amro, Tokio Marine will acquire 100% of Real Seguros, mainly a P&C provider, and 50% of life & pension unit Real Vida e Previdência to form a 50-50 joint venture with ABN Amro Brazil. The transaction is expected to close in the third quarter this year after receiving regulatory approval in Brazil, Japan and the Netherlands. The deal is based on a 10-year bancassurance partnership between the two parties, in which ABN Amro Brazil will distribute on an exclusive basis Tokio Marine's insurance and pension products through its nationwide branch network. ABN Amro is one of the largest foreign-owned retail banks in Brazil. ABN Amro's Brazilian insurance operation is the seventh largest in Brazil with 900,000 clients and it was included in the acquisition of local bank Banco Real in 1998. Millea Holdings is the tenth largest insurance group worldwide with net written premiums of US$21bn.