Global reinsurer SCOR and Japan Post Insurance Co., Ltd. have entered into a Memorandum of Understanding (MoU) regarding the cession of the latter’s Postal Life Insurance policies, and the establishment of a reinsurance vehicle designed to assume underwriting risks held by both companies.
The Postal Life Insurance Policies are reinsured by Japan Post Insurance from the Organization for Postal Savings, Postal Life Insurance and Post Office Network. The MoU has been signed regarding the retrocession of underwriting risks related to these policies to a structure that SCOR will manage.
Under the terms of the MoU, Japan Post Insurance will also invest in the reinsurance vehicle, but intends to hold less than 50% of the voting rights.
SCOR will also invest in the vehicle, which it will manage for risk management purposes. The platform is intended to assume underwriting risks from both Japan Post Insurance and SCOR, and so is expected to provide both companies with greater risk diversification while also creating access to new sources of investment returns.
“Going forward, the parties intend to continue discussions on the details of the transaction outlined above, the investment in the reinsurance vehicle, and related matters. Subject to reaching final agreement in connection with such discussions and obtaining the necessary regulatory approvals and licenses, Japan Post Insurance and SCOR intend to proceed with the commencement of the transaction outlined above and the investment in the reinsurance vehicle.
“Once a formal decision is made regarding the execution of such investment, it will be promptly disclosed,” said the pair in a statement.
