U.S. insurance company Hartford financial (HIG) will its Japanese operations to leasing firm Orix (IX) for 90 billion yen ($875 million), and become the latest foreign insurer to exit from the Japanese market, the Nikkei news service reported on Friday.
Shares in Hartford Financial Services Group rose 1.8% to $35.56, within the 52-week trading range of $24.67 to $36.76. ORIX stock was down 0.3% to $71.44 and within the 52-week range of $60.84 to $92.35.
Hartford officials visiting Japan and representatives from ORIX agreed Friday on the general terms of the deal on Friday, with a final agreement expected as soon as April, according to the report.
Hartford Life Insurance, which has been operating in Japan since 2000, grew on the back of strong sales of variable annuities with guaranteed principal. The company enjoyed the top market share for variable annuities in Japan before the Lehman collapse of 2008.
But in 2009, it was forced to stop selling new policies as guaranteeing paid-in premiums proved costly after the financial crisis.
Other foreign insurers are also leaving Japan or shrinking operations, according to Nikkei. The U.K.’s Prudential decided last year to sell off a Japanese life insurance subsidiary to SBI Holdings. German firm Allianz stopped selling new policies here in 2012.