AM Best Comments on Credit Ratings of Nippon Life Insurance Company Following Announced Acquisition of Resolution Life Group Holdings Ltd.

DECEMBER 16, 2024 08:43 AM (EST)

AM Best Comments on Credit Ratings of Nippon Life Insurance Company Following Announced Acquisition of Resolution Life Group Holdings Ltd.

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FOR IMMEDIATE RELEASE

HONG KONG - DECEMBER 16, 2024 08:43 AM (EST)
AM Best has commented that the Financial Strength Rating of A+ (Superior) and the Long-Term Issuer Credit Rating of "aa-" (Superior) of Nippon Life Insurance Company (Nissay) (Japan) remain unchanged following the announcement of the acquisition of Resolution Life Group Holdings Ltd. (Resolution Life) on 11 December 2024.

Nissay has entered into an agreement to acquire full ownership of Resolution Life, a global insurance group specialising in the acquisition and management of life insurance portfolios, which mainly operates in the United States, Australia and Bermuda. The transaction will consolidate Nissay's existing equity interest in Resolution Life, resulting in a wholly owned subsidiary. The total consideration for this acquisition is expected to be approximately USD 8.2 billion (JPY 1.2 trillion). The transaction is subject to customary closing conditions, including required regulatory approvals, and is expected to close in the second half of 2025.

As part of the transaction, Nissay has reached an agreement with National Australia Bank Limited to acquire the remaining 20% equity stake in MLC Life Insurance (MLC) for approximately AUD 500 million (JPY 50 billion). Post-acquisition, Nissay intends to integrate MLC with Resolution Life Australia Limited, aiming to enhance market presence within the Australian life insurance sector.

AM Best expects the acquisition transaction to have a limited impact on Nissay's balance sheet strength assessment at the current strongest level, considering the group's large capital size relative to the scale of the acquisition, although there could be moderate erosion of the group's risk-adjusted capitalisation. Nissay's absolute capital amounted to JPY 9.4 trillion (USD 62 billion) as of September 2024. Upon completion, the acquisition is expected to deliver immediate profit contributions. Moreover, AM Best expects the acquisition to support Nissay's strategic objectives by enhancing business diversification across geographies for sustainable growth in the global life insurance market.

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AM Best is a global credit rating agency, news publisher and data analytics provider specialising in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City.