Over the past few decades, Japanese life insurance companies have been making major moves in the U.S. market, acquiring well-established life insurers. This article gives insight as to why.
A Growing Trend – Japanese Life Insurers Expanding into the U.S. Market
This trend isn’t random—it’s a strategic shift driven by economic conditions, demographic challenges, and growth opportunities abroad.
Understanding why Japanese insurers aggressively buy U.S. life insurance companies can provide valuable insight into the global insurance industry.
A Look at Japanese Acquisitions in the U.S. Life Insurance Market
Japanese insurers have been expanding their presence in the U.S. for years. Some of the most notable acquisitions and investments in life insurance companies include:
Dai-Chi Life Holdings
It was founded in 1902 as Japan’s first mutual life insurance company and has since converted to a stock-holding company.
Dai-chi Life Holdings acquired Protective Life Insurance Company in 2015 for $5.7 billion.
In addition to the U.S., Dai-Chi Life operates in Australia, Cambodia, India, Indonesia, New Zealand, the U.K., and Vietnam.
Sumitomo Life Insurance Company
Founded in 1907, Sumitomo is a mutual life insurance company.
Sumitomo Life Insurance Company purchased Symetra Financial for $3.8 billion in 2016.
As of March 2024, Sumitomo has $316.8 billion of individual life insurance on its books.
Ratings include:
- S&P Rating of A+
- Moody’s Rating of A1
- Fitch Rating of A+
- Japan Credit Rating of AA
Sumitomo has locations in the U.S., China, Indonesia, Singapore, and Vietnam,
Nippon Life Insurance Company
Nippon Life is the largest life insurance company in Japan and also happens to be one of the top three largest insurance companies in the world.
This company, part of the Nippon Life Group, offers individual insurance, corporate insurance, and asset management.
In 2019, Nippon Life Insurance Company bought National Life Group.
Nippon invested $3.8 billion in Corebridge Financial in 2024.
In addition to the U.S., Nippon owns life insurance companies in Australia, China, India, Indonesia, Myanmar, and Thailand.
Meiji Yasuda Life Insurance Company
Established in 1881, Meiji Yasuda has locations in the U.S., China, the U.K., Poland, and Thailand.
Meiji Yasuda Life Insurance Company recently agreed to purchase Legal & General America (Banner Life) for $2.3 billion from L&G in the U.K.
L&G was looking to simplify its business and refocus on its home market in Britain.
Meiji Yasuda previously acquired The Standard for $5 billion in 2016 and
These deals have allowed Japanese insurers to gain a significant foothold in the U.S., diversifying their portfolios and increasing their market reach.
Why Are Japanese Insurers Targeting the U.S. Market?
The motivation behind these acquisitions can be traced back to several key factors:
Japan’s Aging Population and Shrinking Domestic Market
Japan’s population is one of the oldest in the world, with a declining birth rate and increasing longevity. According to The Japan Times, life insurance companies are expanding overseas due to the shrinking domestic market.
Low Interest Rates in Japan vs. Higher Yields in the U.S.
According to S&P Global, the Japanese economy has struggled with low interest rates for yen-based products, while U.S. markets have offered higher yields.
And while interest rates are rising gradually in Japan, the American market still offers a better investment return for Japanese life insurance companies.
Diversification and Risk Management
Expanding into the U.S. allows Japanese insurers to spread their risk across multiple markets, reducing their dependence on the Japanese economy.
The U.S. life insurance industry is one of the largest and most stable in the world, providing a safer, long-term investment opportunity.
Regulatory Benefits and Growth Potential
Japan’s strict financial regulations limit insurers’ ability to grow domestically, while the U.S. offers more flexibility and expansion opportunities.
By acquiring established U.S. life insurance companies, Japanese insurers can immediately tap into an existing customer base and a well-regulated, profitable industry.
What Does This Mean for U.S. Policyholders and the Market?
While the influx of Japanese ownership in the U.S. life insurance industry has raised some concerns, the impact on policyholders has been largely positive.
Here’s what it means for U.S. consumers:
Increased Financial Stability
Japanese insurers are well-capitalized and conservative in their investment strategies, which can enhance the financial strength of acquired U.S. companies.
This means greater stability for policyholders and reduced risk of insolvency.
Minimal Changes to Customer Experience
In most cases, policyholders see little to no change in their policies after an acquisition.
Japanese insurers generally retain the brand, management, and policy structures of the companies they acquire, ensuring continuity in service.
As insurance agents who work with several of these companies, our experience has been positive. We have not noticed any negative changes in policy sales or servicing.
Potential Product Innovations
Japanese insurers have introduced unique product offerings in their domestic market, including hybrid insurance products and wellness-focused policies.
While it hasn’t happened, some of these innovations could eventually enter the U.S. market, providing policyholders more options.
A More Competitive Market
The life insurance market has become more competitive, with major Japanese insurers investing in U.S. companies.
This can lead to better pricing, improved customer service, and more options for consumers.
Final Thoughts
Japanese life insurance companies are aggressively acquiring U.S. insurers as part of a strategic move to counter challenges in their domestic market.
It adds diversification to their portfolios and takes advantage of higher yields in the U.S.
For U.S. policyholders, this trend generally brings financial stability, minimal service disruptions, and potential for innovation.
As Japanese insurers continue to seek growth opportunities, we can expect further cross-border deals shaping the future of the life insurance industry.
