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Tokio Marine Expands U.S. P&C Presence, Enters Life Market With Buy of Delphi

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Japan-based Tokio Marine Holdings says it has a definite agreement to buy Delphi Financial Group for about $2.7 billion.

The acquisition furthers Tokio Marine’s presence in the U.S. property and casualty market and marks its entrance into the U.S. life insurance market, according to a statement.

Delphi Financial is a holding company comprised of specialty life and property and casualty insurance and insurance-related businesses. Its three main subsidiaries are Reliance Standard Life Insurance Co., Safety National Casualty Corp., and Matrix Absence Management.

“Delphi and its primary subsidiaries are well-positioned to benefit from Tokio Marine’s financial strength and international market knowledge, to leverage the business relationship of Tokio Marine’s existing U.S. operations, particularly Philadelphia Consolidated, and to expand and diversify the revenues and capabilities of Tokio Marine,” the company says in a statement.

Tokio Marine bought Philadelphia Consolidated in December 2008.

As part of its mid- to long-term growth strategy, Tokio Marine has been looking to expand its international insurance business, says Shuzo Sumi, president of Tokio Marine.

Robert Rosenkranz, chairman and chief executive of Delphi, says Tokio Marine expects the company to “operate with a high degree of autonomy.”

Tokio Marine says if Delphi was included in it 2011 earnings estimates, the contribution of international insurance business to Tokio Marine’s total adjusted earnings would go from 37 percent to 46 percent.

The transaction is expected to close during the 2012 second quarter. Tokio will buy all shares of Delphi for $43.87 per Class A and $52.87 per Class B share in cash.  

In May, Tokio Marine Group said it was forming a new U.S. holding company, Tokio Marine North America, to become the new parent for all of the group’s North American entities.

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