Challenger Life Co. Ltd., a subsidiary of Sydney-based asset manager Challenger Ltd., has entered into a quota share reinsurance arrangement with Mitsui Sumitomo Primary Life Insurance Co. Ltd..

Under the arrangement, which starts July 1, the MS&AD Insurance Group Holdings Inc. subsidiary will give Challenger Life an annual amount of reinsurance, covering both Australian and U.S. dollar annuities, of at least ¥50 billion per year for a minimum of five years. The arrangement is subject to review if there is a material adverse change for either of the companies.

Challenger Life currently reinsures an Australian dollar 20-year term product, as well as an Australian dollar lifetime product. It entered into a new agreement with Mitsui Sumitomo Primary Life to start reinsuring the U.S. dollar version of the 20-year product.

Also, MS&AD Insurance Group intends to raise its shareholding in Challenger to more than 15% of issued capital and seek representation on the asset manager's board. After the shareholding increase and the commencement of the U.S. dollar annuities reinsurance, MS&AD Insurance will name one nonexecutive director to join Challenger's board.

As of March 25, US$1 was equivalent to ¥110.11.