Japanese life insurer Dai-ichi Life Insurance Company is set to strengthen its global diversification through a planned acquisition of a 15% stake in UK-based asset manager M&G plc, according to Fitch Ratings.
Announced on May 30, 2025, the deal is expected to positively impact Dai-ichi Life’s credit profile over the medium term, driven by M&G’s robust international investment capabilities, including exposure to non-traditional assets. The acquisition aims to enhance Dai-ichi Life’s international investment portfolio and broaden its global reach. However, the transaction remains subject to regulatory approval in both Japan and the UK.
Fitch anticipates only a minimal and manageable impact on Dai-ichi Life’s capital adequacy and financial leverage. The purchase price of approximately JPY 160 billion (about $1.1 billion) is considered modest relative to Dai-ichi Life’s consolidated net assets of JPY 3,470 billion and cash reserves of JPY 2,456 billion as of March 2025. The insurer’s economic solvency ratio (ESR) is projected to decline slightly from 210% post-acquisition.
Dai-ichi Life plans to account for M&G as an affiliated company using the equity method. Fitch estimates the stake acquisition could increase Dai-ichi Life’s consolidated adjusted profit by around JPY 15 billion annually, compared to a total consolidated profit of JPY 440 billion for the fiscal year ending March 2025. Additionally, Dai-ichi Life intends to delegate $3 billion of its investment assets to M&G, aiming to boost investment diversification and achieve higher returns.
While the partnership is expected to have a neutral effect on M&G’s ratings in the short to medium term, it supports M&G’s strategy to expand its international presence, especially in Asia and Europe. The collaboration is projected to drive at least $6 billion in new business flows into M&G-managed funds over the next five years.
Dai-ichi Life’s strong ratings reflect its leading position in the Japanese life insurance market, its diverse international insurance portfolio, a sustainable positive investment spread, and ongoing efforts to mitigate financial market risks.
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