GE Capital's Japanese Joint Venture Acquires Toho Mutual's Operations

Strategic Insights -

GE Capital's Japanese-based joint venture, GE Edison Life Insurance Co., will acquire Toho Mutual Life Insurance Co.'s operations, including 1.6 million policyholders and related assets. The Policyholder Protection Corp., a Japanese insurance industry safety-net organization, will contribute approximately $3.6 billion as part of the acquisition. In addition to the acquisition, GE Edison will record a 240 billion yen acquisition fee on its statutory balance sheet, in accordance with Japanese accounting rules.

Key Takeaways:

  • GE Capital's Japanese joint venture, GE Edison Life Insurance Co., will acquire Toho Mutual Life Insurance Co.'s operations, including 1.6 million policyholders and related assets.
  • The Policyholder Protection Corp. will contribute approximately $3.6 billion as part of the acquisition.
  • GE Edison will record a 240 billion yen acquisition fee on its statutory balance sheet, in accordance with Japanese accounting rules.
  • The acquisition will increase GE Edison's assets by about $20 billion and increase GE Financial's worldwide assets to $100 billion.
  • GE Financial Assurance, the consumer insurance and investment arm of GE Capital, will contribute about $590 million of capital into GE Edison to support strong solvency margins.
  • The acquisition is expected to be completed by next March.
  • GE Edison Life sells numerous products, including life insurance and asset management.

Statistics:

  • 1.6 million: The number of policyholders acquired by GE Edison Life Insurance Co.
  • $3.6 billion: The amount contributed by the Policyholder Protection Corp. as part of the acquisition.
  • 240 billion yen: The acquisition fee recorded by GE Edison on its statutory balance sheet.
  • $20 billion: The increase in GE Edison's assets due to the acquisition.
  • $100 billion: The expected increase in GE Financial's worldwide assets after the acquisition.
  • 590 million: The amount of capital contributed by GE Financial Assurance into GE Edison.
  • March: The expected completion date of the acquisition.

Sources:

  • GE Capital Services
  • GE Edison Life Insurance Co.
  • Policyholder Protection Corp.
  • A. M. Best Company, Inc. (BestWire, June 11, 1999)
  • A. M. Best Company, Inc. (BestWeek, Dec 22, 1999)