JAPAN’S demographic challenges are nothing new. For years the country has been struggling with an ageing population, with the IMF predicting that its working-age headcount will fall to just 55m by 2050 – well below its peak of 87m in 1995.
The country’s leaders are well aware of the problem. Prime Minister Shinzo Abe’s programme of economic reforms, dubbed Abenomics, is full of measures designed to overcome the problem, from boosting daycare to getting women back into work to encouraging high inflation – a side effect of which should be to put pension savers off retirement.
But companies are feeling the strain too – particularly insurers, whose revenue growth is threatened as retiring workers shift investments around. So it’s no wonder they’re looking abroad for growth. Just this month, Sumitomo paid around £210m for a stake in an Indonesian insurer, while Meiji Yasuda splashed out £430m on a Thai rival.
Now Sompo is after a slice of the British market, targeting private equity asset Canopius, a stable, profitable insurer with business units across both established and emerging markets.
The move leaves little doubt that Japanese firms are on the look out for acquisitions – and they’ve got plenty of cash to spend.
All of which means that last minute discussions to pin down a value for Canopius should be very interesting indeed.