After months of due diligence on potential targets in Australia and Canada, Tokio Marine Holdings, the Japanese insurer backed by Berkshire Hathaway, is poised to move forward with what would be its largest acquisition ever. The multi-billion-dollar cross-border deal is part of CEO Satoru Komiya's broader push to diversify the major Japanese financial group's operations.
Over the past several months, Tokio Marine has weighed a number of potential takeover candidates, including Australia's two biggest general insurers, Insurance Australia Group (ASX: IAG) and Suncorp Group Ltd (ASX: SUN), as well as Canada's Intact Financial Corporation (TSX: IFC). Both IAG and Suncorp carry market values exceeding $14 billion (around A$20 billion), while Intact Financial is valued at roughly $36 billion (approximately C$50 billion).
According to two sources with direct knowledge of the matter, Suncorp has emerged as the preferred target, while Intact Financial was ruled out due to its sheer size. The sources cautioned that negotiations remain ongoing and a final deal is not guaranteed. Tokio Marine declined to comment on market speculation, while Suncorp, IAG, and Intact Financial all declined to respond.
Part of Tokio Marine's acquisition plans were first reported by The Australian. Earlier this year, in March, Warren Buffett's Berkshire Hathaway acquired a 2.5% stake in Tokio Marine and simultaneously struck an agreement to collaborate on large-scale cross-border M&A projects. The two parties intend to pursue substantial acquisitions together, with Berkshire contributing balance-sheet firepower and Tokio Marine bringing operational expertise and deal-sourcing capabilities.
Since 2008, Tokio Marine has completed five major overseas property and casualty insurance acquisitions, with a combined transaction value of approximately $19 billion. Its largest deal to date was the $7.5 billion purchase of U.S.-based HCC Insurance. The sources indicated that Berkshire's precise role in this potential transaction remains unclear, but the collaboration framework is focused on insurance M&A outside Japan, allowing Tokio Marine to preserve capital strength for domestic investments.
Tokio Marine was the primary insurer for Greensill Capital, the supply chain finance firm that collapsed in 2021. Two years prior to that, the Japanese company acquired Sydney-based Bond & Credit Co (BCC), which had provided billions of dollars in insurance coverage to Greensill. The BCC purchase was part of Tokio Marine's aggressive global expansion, coinciding with its acquisition of the 50% joint venture stake held by IAG.
IAG offers a wide range of insurance products, including motor and agricultural coverage, under brands such as NRMA and CGU across Australia and New Zealand. Brisbane-based Suncorp, which owns insurance brands like AAMI and GIO, has been viewed as a potential takeover target in the insurance sector since selling its banking arm to ANZ Group Holdings Ltd (ASX: ANZ) in 2024. Suncorp recently posted an annual net profit of A$1 billion, declared a special dividend, and announced a share buyback program.
Long-serving CEO Steve Johnston said Suncorp has completed investments in new IT systems, streamlined its business structure, and signed new reinsurance agreements designed to reduce earnings volatility and the impact of natural catastrophes. "This result proves that a well-governed insurer can serve both customers and shareholders," he said. Over the past 12 months, Suncorp's share price has fallen 15%, while IAG's has declined roughly 10%.
Australia has long been a key investment destination for Japanese capital, with major acquisitions across energy, logistics, industrial, consumer, and property sectors. The Australian insurance industry has also attracted Japanese interest, with Dai-ichi Life and Tokio Marine both having previously acquired local mid-sized insurers. According to a joint report from law firm Herbert Smith Freehills and the Australian National University, Japanese foreign direct investment hit a record US$113 billion last year, spanning 77 transactions, including Mitsui & Co.'s US$5.4 billion investment in the Rhodes Ridge iron ore joint venture. The report noted that Australia's life insurance and financial services sectors hold strong appeal for Japanese investors, thanks to population growth and a substantial consumer base.
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