Japan's MS&AD subsidiary to spend $400 million to buy U.S. reinsurance broker

TOKYO Mitsui Sumitomo Insurance Company, a subsidiary of Japan's MS&AD Insurance Group Holdings, will spend about $400 million to buy the U.S. reinsurance broker Transverse, the Nikkei business daily reported on Sunday.

The Japanese property insurer hopes to gain know-how of the reinsurance broker business, which could help with the expansion of an insurance market specialized in fields such as cybercrime, the Nikkei said.

An announcement is expected by the end of the month, according to the Nikkei, who said that the company will pay up to $150 million, up to the U.S. company's earnings after the deal.

MS&AD is considering various business investment opportunities, including those reported in the media, but nothing has been decided.

It said it would announce anything that needed to be disclosed when it was decided.

Transverse, based in New Jersey, receives about 5 per cent of insurance premiums as commission from insurers and reinsurance companies, according to the Nikkei.

In the United States, a growing risk of natural disasters, terrorism and cybercrime has resulted in an increase in sales of policies provided by insurers that specialize in certain fields, such as transport and medicine.

Insurance against cyberattacks has not become widespread in Japan, the Nikkei said.