Japan’s Dai-ichi Life Eyes M&A in Southeast Asia to Grow Abroad

Dai-ichi Life Holdings Inc. is considering mergers and acquisitions in Southeast Asia as part of its plan to expand overseas, eyeing a growing but increasingly crowded market.

Japan’s biggest listed life insurer is looking at the Philippines and Malaysia as emerging markets that offer business opportunities as more households ascend to middle class, said Brett Clark, Senior Managing Executive Officer in charge of the firm’s Asia-Pacific region outside of Japan.

Dai-ichi Life is also interested in expanding its customer base in Singapore, which has a lucrative market serving high net worth individuals but is also highly competitive, he said in an interview.

“The whole of Asia Pacific is a competitive market and so we’re not complacent,” Clark said. “We would prefer to avoid small and subscale positions in many markets and would rather have larger and scaled positions in fewer markets.”

Major Japanese life insurers are seeking to expand profits from overseas operations, as a declining birth rate and an aging population in the home market limit potential for growth. But the biggest insurance markets in the US and Europe are already crowded, and competition is heating up in Asia, particularly in developed economies like Singapore.

Sumitomo Life Insurance Co., for one, boosted its presence in the city state in a big way last year, making Singapore Life Holdings Pte a wholly owned subsidiary. 

Dai-ichi Life plans to generate about half of its group adjusted profit from overseas life insurance operations in the fiscal year ending March 2031, with half of that coming from the Asia-Pacific region outside of Japan. The firm aims to increase profit from the region to ¥1.5 trillion from ¥576 billion over the period. Group adjusted profit is used to calculate shareholder returns, adjusting net income for accounting gains and losses.

“If we could add an operating unit in Singapore or Malaysia or the Philippines, that would be ideal for us sometime over the next few years,” Clark said. Potential measures include investments in local insurers, and it’s also considering asset management firms as M&A targets, he said.

Dai-ichi Life already has operations in Australia, India, and some Southeast Asian markets including Vietnam. Clark, in fact, was an executive at Tower Australia Group Ltd. when Dai-ichi acquired it in 2011. 

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