Tokio Marine Holdings will acquire the medical stop-loss insurance business of AIG, the largest acquisition deal of a business division from a foreign peer.
The deal comes as the company continues its aggressive overseas offensive.
Tokio Marine will buy the business for just over JPY30bn (USD$266mn) via its U.S. subsidiary HCC Insurance Holdings, reported The Nikkei.
Medical stop-loss insurance covers claims above a certain cost for companies and organisations that fund their own employee insurance plans and is a common arrangement in the U.S.
Such specialty insurance products are HCC's strengths. Tokio Marine's premium income from US medical stop-loss coverage, including at HCC, grew 4 percent to around $1bn in 2016.
The market for such coverage is growing as medical advances send costs increasing rapidly. The business is the biggest source of premium income for HCC, which ranks fifth in the U.S. market for such operations and is likely to rise to third with the addition of AIG's operations.
In order to focus on its casualty insurance, AIG has shed businesses in recent years which led the group to seek a buyer for its medical stop-loss operations.
Tokio Marine has been more forceful than other Japanese nonlife insurers in expanding abroad. By strengthening its U.S. presence, Tokio Marine hopes to spread the risks it faces in disaster-prone and ageing Japan.