MS&AD Insurance Group Holdings Inc. will spend £175 million to acquire a 5% stake in a Jersey-based unit of Swiss Re AG that buys up U.K. life insurance policies.
The Japanese group is set to invest in ReAssure Jersey One Ltd. by the fourth quarter of fiscal 2017-18, with plans to raise its stake to 15% by 2020 for £625 million.
MS&AD Insurance will fund the transaction with cash on hand and will send one director to ReAssure Jersey One.
ReAssure Jersey One is operating a so-called closed-book life business, where operators buy existing policies from life insurers instead of selling policies themselves. The deal marks the Japanese company's first major investment in Europe and is expected to pave the way for its business expansion in the region and diversification of its revenue sources.