Bloomberg News

Nippon Life to Invest 500 Million Euros in Allianz’s Unit

July 05, 2011

(Updates with overseas alliances in the third paragraph.)

July 5 (Bloomberg) -- Nippon Life Insurance Co., Japan’s biggest life insurer, will invest 500 million euros ($724 million) in a unit of Allianz SE as it expands overseas.

Nippon Life will buy bonds issued by the Allianz’s unit that have rights to be converted into equities of the Munich- based parent company, Nippon Life said in a statement posted on its website today. The transaction, aimed at strengthening the two companies’ capital ties, will be completed on July 7, the Japanese company said.

Nippon Life has been seeking alliances with overseas rivals to make up for slowing premium growth in the home market, where the average age is increasing at the world’s fastest rate. The company, a mutual society owned by policyholders, agreed in March to buy a 26 percent stake in India’s Reliance Life Insurance Co., marking the largest foreign direct investment in the South Asian nation’s insurance industry.

Nippon Life, with head offices in Tokyo and Osaka, invested $250 million in Northwestern Mutual Life Insurance Co. last year and $500 million in Prudential Financial Inc. in 2009. Both companies are based in the U.S.

The investment in Northwestern Mutual was part of the two insurers’ efforts to expand an alliance formed in July 2008 when Nippon Life bought a 5 percent stake in Russell Investments, a Northwestern subsidiary.

--Editors: Russell Ward, James Gunsalus

To contact the reporters on this story: Komaki Ito in Tokyo at kito@bloomberg.net; Tomoko Yamazaki in Tokyo at tyamazaki@bloomberg.net

To contact the editor responsible for this story: Andreea Papuc at apapuc1@bloomberg.net


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