ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter
Business

Japan's MS&AD to invest $400m in Australian pension giant Challenger

Tokyo-based group seeks to grab piece of growing superannuation pie

 (placeholder image)
Workers stroll among the office towers Sydney's Barangaroo business district.   © Reuters

TOKYO -- MS&AD Insurance Group Holdings will spend 44 billion yen ($401 million) to acquire a 6%-plus stake in Challenger, a leading player in Australia's fast-growing superannuation industry.

Sydney-based Challenger offers retirement-focused insurance and asset management services. It boasts a roughly 50% share of Australia's superannuation market by sales, leading its closest rival by a margin of more than 2-to-1.

In Australia, employers must contribute 9.5% of workers' pay toward their retirement. The country's superannuation market is estimated to balloon to 9.5 trillion Australian dollars ($7.47 trillion) in 2035 from the current A$2 trillion, driven by a rapidly aging population and planned hikes in contribution rates.

MS&AD affiliate Mitsui Sumitomo Primary Life Insurance has already been testing the waters via a business partnership with Challenger. Tokyo-based MS&AD aims to lift its stake to around 10% within a year and may make the Australian company an equity-method affiliate further down the road. Investing in Challenger will help MS&AD acquire know-how in the Australian pension market and co-develop new products later on.

Such other Japanese players as Nippon Life Insurance and Dai-ichi Life Insurance have already entered Australia's growing life insurance market.

MS&AD, whose core business consists of nonlife polices provided by Mitsui Sumitomo Insurance and other units, continues to try to diversify its earnings base.

(Nikkei)

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more