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SCOR and Japan Post Insurance plan reinsurance vehicle for Postal Life
The memorandum covers the retrocession of underwriting risks, with SCOR expected to manage the vehicle and both firms to invest while Japan Post Insurance targets voting control below 50%.
Global reinsurer SCOR and Japan Post Insurance Co., Ltd. have signed a Memorandum of Understanding to develop a reinsurance vehicle tied to Japan Post Insurance’s Postal Life Insurance policies, according to Reinsurance News.
Under the proposed structure, the Postal Life Insurance policies already sit within a reinsurance arrangement in which Japan Post Insurance reinsures the policies from the Organization for Postal Savings, Postal Life Insurance and Post Office Network, while the new vehicle is designed to take on underwriting risks held by both companies.
The MoU also outlines a retrocession framework for the underwriting risks to a structure SCOR will manage. Japan Post Insurance plans to invest in the vehicle but intends to hold less than 50% of the voting rights, while SCOR will also invest and manage it for risk management purposes.
The platform is expected to provide both firms greater risk diversification and create access to new sources of investment returns. SCOR and Japan Post Insurance said they will continue discussions on deal details, and that they plan to proceed only after reaching a final agreement and obtaining necessary regulatory approvals and licenses.