Resolution takeover leaves Nippon Life ratings unchanged

Nippon Life Insurance Company’s financial strength rating of A+ remains unchanged after it announced plans to acquire Bermuda-based Resolution Life Group, AM Best said. 

The ratings agency said the $8.2 billion takeover of Resolution Life, announced last week, will have a  limited impact on the company’s balance sheet strength, which AM Best assessed at the 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”.

AM Best added: “Nippon Life’s absolute capital amounted to JPY 9.4 trillion ($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 Nippon Life’s strategic objectives by enhancing business diversification across geographies for sustainable growth in the global life insurance market.”

Nippon Life is buying the shares it does not already own in Resolution Life in the deal.  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.

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