Tokio Marine has completed a funding agreement-backed notes programme of up to $10 billion through a Cayman Islands structure, as the Japanese insurer attracts fresh investor interest and expands its global capital strategy.
The transaction, advised by offshore law firm Conyers as special Cayman Islands legal counsel, marks the first of its kind in the Cayman Islands under updated insurance legislation introduced in 2022. The notes are issued via Tokio Marine Global Funding SPC, a segregated portfolio company, and are backed by funding agreements from an affiliated Cayman-based insurer Tokio Marine Funding Solutions PIC.
The programmd has been assigned an ‘AA-’ credit rating by Fitch Ratings, indicating the strength of the underlying obligations and support from Tokio Marine & Nichido Fire Insurance Co., the group’s core insurance entity. Fitch said the rating aligns with the insurer’s financial strength and is supported by a formal guarantee from the parent company.
The issuance comes as Tokio Marine draws increased attention from global investors. Berkshire Hathaway recently agreed to invest $1.8 billion for a 2.5% stake in the company, alongside a broader strategic partnership that includes reinsurance and potential collaboration on global deals.
The funding structure allows Tokio Marine to raise capital through secured notes linked to insurance liabilities, with payments to investors supported by cash flows from the underlying funding agreements. According to Fitch, those obligations rank alongside policyholder claims in the event of liquidation, underlining the credit profile of the notes.
Fitch said the rating could be downgraded if Tokio Marine’s capitalisation weakens or underwriting performance deteriorates, while improvements in capital strength and profitability could support an upgrade.
The Cayman Islands structure reflects a broader trend of insurers using offshore vehicles and structured products to access global capital markets, particularly as demand for highly rated insurance-linked assets grows.
