TOKYO (Reuters) - Japan's MS&AD Insurance Group Holdings Inc (8725.T) said on Friday it had agreed with Swiss Re AG (SRENH.S) to invest 800 million pounds ($1.05 billion) to take a stake of up to 15 percent in UK-based ReAssure Jersey One Ltd.
MS&AD and rival Japanese property and casualty insurers have been aggressively acquiring and investing in overseas assets as they seek to diversity their risk portfolio.
ReAssure is the latest deal for MS&AD, which announced two overseas transactions in August, including the $1.6 billion acquisition of Singapore's First Capital Insurance.
MS&AD said that by taking a stake in unlisted ReAssure it aimed to build know-how of the closed-book life business, where firms buy policy portfolios from other firms instead of underwriting new ones.
It expected a rise in policy portfolios up for sale as the global insurance industry faced stricter capital regulation and diminishing investment returns due to low interest rates.
While the closed-book life insurance business has little presence in Japan, Dai-ichi Life Holdings Inc (8750.T) is also trying to expand in the category after its $5.6 billion acquisition of Protective Life of the United States in 2015.
MS&AD said it would initially buy 5.0 percent of ReAssure from Swiss Re for 175 million pounds in cash, aiming to close the transaction in the first quarter of 2018, pending regulatory approval.
The remainder of the 800 million pound investment, in the form of new shares, would be completed within three years from the closing of the initial purchase.
MS&AD's latest deal shows it is still hungry for acquisitions even after it agreed to pay $5.3 billion for Amlin PLC, an underwriter in the Lloyd's of London specialist insurance market, in 2015.
Shares of MS&AD were up 1.5 percent in early trade, while Tokyo's benchmark Nikkei average .N225 was up about 0.2 percent.
(Additional reporting by Chang-Ran Kim; Editing by Stephen Coates)