Challenger extends MS Primary reinsurance partnership

Market Announcement

Challenger extends MS Primary reinsurance partnership

22 May, 2024


Challenger Limited (ASX:CGF) announces it will extend the reinsurance partnership between Challenger Life and Mitsui Sumitomo Primary Life Insurance Company Limited (MS Primary)1.

Since November 2016, Challenger Life has successfully partnered with MS Primary, a leading annuities provider in Japan, to reinsure Australian dollar annuities. The arrangement has subsequently expanded to include US dollar and Japanese yen denominated annuities.

Under the new agreement, Challenger Life will continue to receive a quota share of reinsurance across Australian dollar, US dollar and Japanese yen denominated annuities issued in Japan by MS Primary, commencing from 1 July 2024.

MS Primary will provide to Challenger Life an annual amount of reinsurance of at least ¥50 billion per year (currently ~A$500 million2) for the next five years, subject to review in the event of a material adverse change for either MS Primary or Challenger Life.

Challenger Life will also support MS Primary with any new reinsurance requirements that MS Primary may have.

MS Primary is a subsidiary of MS&AD Insurance Group Holdings Inc., which holds 15% of Challenger’s issued share capital, and under a long-term strategic relationship has representation on the Challenger Limited Board.

Challenger’s Chief Executive Officer and Managing Director, Nick Hamilton said:

“We are delighted to extend our reinsurance partnership with MS Primary. This reflects the strong, collaborative and mutually beneficial relationship that we have developed over a number of years, and it was a privilege to celebrate the eighth year of our reinsurance partnership with a MS Primary delegation at our Sydney office this week.

“The arrangement that we’re announcing today also supports our focus on longer duration annuity business with the objective of improving the quality of Life’s annuity book growth and driving stronger returns.

“Challenger Life is an important reinsurance partner for MS Primary and we’re very pleased to continue to support its growth. We look forward to the continued success of our relationship and supporting MS Primary to provide financial security to its customers.”

MS Primary Executive Chairman, Yasuhiro Nagai said: “The extension of the reinsurance partnership demonstrates our commitment and confidence in Challenger. Challenger is a special business partner to MS Primary as a reliable reinsurer. More recently, our partnership has expanded to include asset management in Australia and Japan. We hope to continue to explore and exploit opportunities with Challenger to further mutual benefits and enhance the business partnership.”


1 Subject to execution of final legal documentation.
2 Based on 3-month average exchange rate at 20 May 2024.