Japanese insurer Sompo to buy Aspen for $3.5 billion

Sompo said Wednesday it had agreed to buy Bermuda-based specialty insurer and reinsurer Aspen Insurance for $3.5 billion in cash.

The deal will add about $4.6 billion in gross written premium to Sompo, the Tokyo-based insurer said.

“Strategic acquisitions have been a key part of our growth plan to build a robust and diversified global P&C platform, and Aspen represents an excellent opportunity at the right time in the market cycle,” James Shea, CEO of Sompo P&C said in a statement.

Sompo will pay $37.50 per share for Aspen, which is traded on the New York Stock Exchange. Aspen shares closed at $32.21 Tuesday, and had risen significantly in the past week on rumors that Sompo would buy it.

It debuted on the NYSE in May, raising nearly $400 million. Private-equity firm Apollo Global bought Aspen in 2019 and maintains a majority stake in the company.

Aspen reported a second-quarter profit of $46.5 million, down 32.6% from the same period in 2024, and an 85.1% combined ratio.

The deal makes sense, given Aspen’s share price fell below its initial public offering price after it released its second-quarter results and Sompo’s purchase price is 36% above its unaffected stock price, analysts at Wells Fargo said in a note Wednesday.

“We think it does screen as a good deal at 1.3x current book and allows Apollo (owns 82% of shares) to monetize the business much quicker and provides Aspen with a strong long-term partner in the process,” the note said.

The deal is expected to close in the first half of 2026.

Aspen’s business is about 62% insurance and 38% reinsurance. It is headed by CEO and Executive Chairman Mark Cloutier, who joined the insurer from rival Brit after the acquisition by Apollo. Sompo did not disclose information on Aspen’s future structure or management.

Sompo is one of the largest property/casualty insurers in Japan. In fiscal 2025 it reported 5.07 trillion yen in insurance revenue ($34.5 billion) and a profit of 245.21 billion yen.

Aspen will be its second purchase of a Bermuda-based company in the past decade. It bought Endurance Specialty for $6.3 billion in 2017.

Sompo has made several other acquisitions in recent years, including U.S. crop insurer Diversified Crop Insurance Services in 2020, as part of a strategy to diversify its business.

Aspen’s shares were above $36 in early trading Wednesday.