Sompo to acquire Aspen for $3.5bn in international expansion push

Sompo has agreed to acquire Aspen Insurance Holdings for $3.5bn in cash, in a deal that will broaden the Japanese group’s international portfolio and strengthen its position in core specialty and reinsurance lines.

Under the terms, Sompo will pay $37.50 per Aspen share, a 35.6 percent premium to its unaffected share price, with all ordinary shares redeemed for cash and delisted from the New York Stock Exchange. Aspen’s preference shares will remain outstanding.

The transaction, approved unanimously by both boards, is expected to close in the first half of 2026, subject to regulatory and antitrust approvals.

Aspen is a Bermuda-based specialty insurer and reinsurer with gross written premiums of $4.6bn in 2024, spanning cyber, credit and political risk, marine, UK property and construction, and US management liability.

It also writes reinsurance across casualty, property catastrophe and specialty lines, with a strong Lloyd’s syndicate offering global reach.

Strategic rationale

Mikio Okumura, Sompo group CEO, said the deal was part of a broader plan to accelerate capital circulation and international expansion.

“This transaction is an excellent example of our initiatives in action,” he said. “I would like to express my sincere appreciation for the successful realization of this transaction, made possible through the diverse capabilities of the SIH team, Jim’s leadership, and close collaboration with Sompo Holdings.”

James Shea, CEO of Sompo P&C, said acquisitions were a core element of Sompo’s growth strategy.

“Aspen represents an excellent opportunity at the right time in the market cycle. The market continues to value platforms that can underwrite and manage capital and risk at scale – and with exceptional skill,” he said.

Aspen chairman and group CEO Mark Cloutier described the transaction as a strong outcome for shareholders and staff.

“Sompo is a highly regarded brand and through this process it has become clear they represent a long-term owner for Aspen that respects our business and shares our values. The significant premium to our unaffected share price reflects the quality Sompo sees in our team, the depth of distribution relationships and the strength of our franchise,” he added.

Capital markets and financial profile

A major factor in the deal is Aspen Capital Markets (ACM), its alternative reinsurance platform managing more than $2bn in assets.

ACM provides fee-based income through collateralised quota share vehicles, with 80 percent of 2024 fee income generated from non-catastrophe, long-tail lines.

Sompo said the platform would enhance its capital management flexibility and reduce earnings volatility.

Aspen has also taken steps to strengthen its balance sheet, including a loss portfolio transfer and adverse development cover for prior years.

In 2024 it reported a combined ratio of 87.9 percent and operating return on equity of 19.4 percent. Sompo expects the acquisition to be immediately accretive to group ROE, contributing to its target of 13–15 percent adjusted consolidated ROE and above 12 percent EPS growth by 2026.

Next steps

Following shareholder approval, closing is expected in early 2026.

Both companies are now preparing integration plans to align Aspen with Sompo’s overseas insurance operations and capitalise on cost and capital synergies.

Advisors on the deal include Morgan Stanley and Skadden for Sompo, and Goldman Sachs, Insurance Advisory Partners and Sidley Austin for Aspen.