Japanese insurers' UK PRT acquisitions create template for future deals

As Japanese insurers continue to look overseas for growth, minority stakes in pension risk transfer insurers provide a blueprint for future investment in the UK.

Japanese insurers have been active international acquirers in recent years, and while most of their deals have been focused on other markets, they have picked up minority shareholdings in several companies active in the UK pension risk transfer (PRT) market over the past year. Meiji Yasuda Life Insurance Co. now owns 5.33% of Legal & General Group PLC (L&G), part of its acquisition of L&G's US business, which closed in February. Also, Daiichi Life Group Inc. became the largest shareholder in asset manager and life insurer M&G PLC with a 15.85% stake acquired in a strategic partnership announced in 2025.

These deals suggest a preference for minority investments followed by strategic alliances over whole-company acquisitions.

"While this approach is not necessarily optimal from a pure equity acquisition perspective, it reflects a more relationship-driven, Japanese-style investment strategy," said Koichi Niwa, analyst at UBS Securities Japan.

A booming market

A particular focal point in Japanese insurers' international push has been life and health insurance in the US, Bermuda and the wider Asia-Pacific region, S&P Global Market Intelligence data shows.

Meanwhile, the UK PRT market has proved attractive to investors more generally, with three acquisitions announced in 2025, two of which have closed. Brookfield Wealth Solutions Ltd., the insurance arm of Canadian investment company Brookfield Corp., acquired Just Group PLC; and Athora Holding Ltd., a life insurance consolidator co-founded by alternative asset manager Apollo Global Management Inc., bought Pension Insurance Corp. Group Ltd. JAB Insurance LLC, a subsidiary of Luxembourg-based investment firm JAB Holding Company S.à.r.l., is acquiring Utmost Life and Pensions Ltd.

The UK PRT market has grown rapidly in recent years as more pension schemes reach the appropriate level of funding for risk transfer. While last year was quieter than 2024 or 2023, measured by deal value at £38.17 billion according to Hymans Robertson, 2025's deal activity was still high relative to pre-2023 levels. A record 370 deals were completed in 2025, the consultancy said.

Fellow consultancy Lane Clark & Peacock predicted in November 2025 that there would be between £350 billion and £500 billion-worth of UK PRT deals executed over the next decade. The market could be attractive to Japanese life insurers because, although Japan lacks a PRT market, the risks and products are familiar.

"They see it as being a type of risk that they can understand because they have a lot of pension risk themselves," said Hugo Laing, a partner at law firm Debevoise & Plimpton who specializes in insurance transactions. Pension de-risking is "really booming in the UK," Laing added.

Japanese life policies historically offered high guaranteed returns, which insurers struggled to meet when interest rates were low. Now that rates are rising and the market is returning to normal, precedents from Europe and the US are becoming increasingly relevant, according to Niwa.

"The UK in particular serves as an accessible entry point for Japanese insurers, given its language, business culture and institutional frameworks," Niwa said in an email.

Minority interest

The most likely way for Japanese insurers to participate in the UK pension risk transfer market is by providing asset management capabilities and making a minority investment.

Participating in consortia to buy stakes, as Japanese life insurance group T&D Holdings Inc. did when it acquired 29.9% of German life insurance consolidator Viridium Group GmbH & Co. KG in 2025, is another way into the market.

Niwa sees eventual full acquisitions on a phased basis, "if conditions allow," as a realistic form of future investment.

The potential for additional deals should not be overstated. Niwa said there are no signs of "significant expansion" beyond current levels.

UK insurance investments may be seen more as a step along a path rather than the ultimate destination. Japanese insurers likely see the UK as a way to get in with Europe or the US more broadly, given their similar operating models, said Niwa.

Lloyd's potential

Another part of the UK insurance market that could prove attractive to Japanese insurers is Lloyd's of London. Like PRT writers, Lloyd's insurers have attracted significant interest from insurance industry buyers generally. Zurich Insurance Group AG's pending takeover of specialty insurer Beazley PLC, owner of the largest managing agent in Lloyd's, is the latest in a series of deals.

Many potential targets remain available in the Lloyd's marketplace. Consultancy Oxbow Partners in April 2025 identified 27 Lloyd's syndicates that could be looking to sell in the next few years. Following the recent spate of M&A activity, there are still around 20 such targets left, according to Paul De'Ath, head of market intelligence at Oxbow Partners.

"As time moves on, more will fit into that category as well because there'll be others that have been bought in the last couple of years by private equity and then might be getting closer to the point where they're more up for a sale," De'Ath said in an interview.

The jury is out, however, on whether any future buyers will be Japanese insurers.

"We see limited scope for additional M&A by Japanese insurers in the Lloyd's market at present," Niwa said, adding that Japanese non-life insurers "on the whole, do not appear to have a particularly strong appetite for reinsurance."