Tokio Marine picks Suncorp as takeover target, shares jump 5.2%

Tokio Marine Holdings has picked Australian insurer Suncorp as its preferred takeover target after reviewing several options, sending Suncorp shares up 5.2%.

The Financial Times reported the move Tuesday, citing two people with direct knowledge of the matter. The Berkshire Hathaway-backed Japanese insurer reviewed several targets over the past months, including Insurance Australia Group and Canada's Intact Financial Corp, the report said.

The Canadian general insurer was deemed too large, the people told the FT. Suncorp emerged as the preferred target, though the sources warned discussions were ongoing and there was no certainty a deal would result.

Shares of both Australian insurers jumped nearly 5% after the news, LSEG data showed. Suncorp shares were last up 5.2%, while IAG shares rose as much as 4.8% before retreating slightly to trade 4.4% higher as of 0139 GMT.

Reuters could not immediately confirm the report. Neither Suncorp nor IAG immediately responded to Reuters requests for comment.

A takeover of Suncorp would reshape Australia's general insurance market, where Suncorp and IAG are the two largest underwriters of home and motor cover. Suncorp, based in Brisbane, also operates a banking arm that it has been winding down to focus on its core insurance business. For Tokio Marine, the deal would extend its international expansion beyond existing operations in the U.S., Europe and Asia, and follows Berkshire Hathaway's recent stake in the Japanese insurer.

The move also reflects continued consolidation in global property-and-casualty insurance, where scale has become a competitive advantage in pricing and catastrophe risk management. Japanese insurers have been among the most active acquirers in the sector, using strong domestic cash flows to fund overseas purchases as their home market matures. A successful bid for Suncorp would give Tokio Marine a leading position in Australia's general insurance market and a platform for further growth across the Asia-Pacific region.

Investors will watch for confirmation from either company on the status of the talks, and for any regulatory review should a formal bid emerge. Suncorp's board has not commented publicly on the approach, and any deal would likely face scrutiny from Australia's competition regulator given the size of the target.

This article is for informational purposes only and does not constitute investment advice.