Japan Post Insurance could invest up to $2bn in new Global Atlantic reinsurance sidecar

Japan Post Insurance is considering making an investment of as much as $2 billion into a new reinsurance sidecar-like co-investment vehicle to be sponsored by U.S. life, retirement and annuities insurance and reinsurance company, Global Atlantic Financial Group.

The company said it anticipates owning more than 50% of the reinsurance investment vehicle and allocating between $1 billion and $2 billion to it.

Recall that, a tripartite arrangement was established involving Japan Post Insurance, private equity and buyout giant KKR, and Global Atlantic Financial Group back in 2023.

As a result of that, Japan Post Insurance made a material investment into a reinsurance co-investment vehicle sponsored by Global Atlantic, which we assumed was a vintage of the Ivy Re sidecar.

Global Atlantic established the Ivy Re reinsurance co-investment and sidecar-like structure in Bermuda in 2020, since when it has used this as a vehicle for channelling supportive third-party capital to a number of its major life reinsurance deals.

Japan Post Insurance saw the opportunity as a way to deploy capital into a growth area of global life and annuity reinsurance markets, sourcing diversified reinsurance-linked returns to augment its business.

Now, the insurer is looking to provide some of the funding for a new vehicle that Global Atlantic is expected to launch, which we again believe could be another Ivy Re vintage, so a similar life reinsurance sidecar structure.

Japan Post Insurance said it has executed a memorandum of understanding with KKR and Global Atlantic, beginning discussions on a new investment into a new reinsurance vehicle to be sponsored by Global Atlantic.

The new sidecar-like vehicle is expected to participate in Global Atlantic’s insurance and reinsurance business and may also participate in strategic opportunities as they arise.

Terms and conditions of the vehicle and investment will now be negotiated and Japan Post Insurance expects it could make a decision on the allocation within three months, while capital may be deployed as early as 2026.

The use of third-party investor capital in life and annuity reinsurance sidecars and co-investment structures is becoming increasingly prevalent, with growing numbers of major players leveraging the appetite of investors to participate in their businesses through efficient vehicles.

Find details of numerous reinsurance sidecar investments and transactions, including life reinsurance sidecar structures, in our directory of collateralized reinsurance sidecar transactions.