Sompo spends $3.5bn to buy Aspen as part of diversification plan

A wholly owned subsidiary of Japan-headquartered Sompo International Holdings has today (27 August 2025) confirmed a merger with (re)insurer Aspen Insurance Holdings, purchasing 100% of Aspen’s class A ordinary shares for a collated value of $3.5bn (£2.65bn).

The transaction has already been unanimously approved by both companies’ boards of directors and is expected to close in the first half of 2026, subject to customary closing conditions such as the receipt of antitrust and insurance regulatory approvals, consents and expiration of applicable waiting periods.

The acquisition is in support of Sompo’s plans to diversify both its property and casualty (P&C) portfolio and geographic locations, to give the insurer more clout outside of its native Japan.

Aspen fulfils this goal by providing access to specialty business lines – such as cyber, credit and political risk, inland marine, UK property and construction and US management liability – reinsurance classes, a Lloyd’s syndicate and broker relationships.

The firm also has a footprint in Bermuda, the US, the UK, Canada, Singapore and Switzerland.

Sompo further expects Aspen to bolster its financial standing, revenue streams and capital management options – the overall business has $4.6bn (£3.5bn) of annual gross written premium (GWP), $2bn (£1.5bn) of assets under management and 80% of fee income in 2024 generated from non-catastrophe, long-tail lines of business.

For 2024, Aspen achieved a combined ratio of 87.9% and operating return on average equity of 19.4%.

A ‘long-term owner’

Under the terms of the merger agreement, each issued of Aspen’s class A ordinary shares will be converted into the right to receive $37.50 (£28.40) in cash at closing.

This represents a 35.6% premium to the unaffected share price of $27.66 (£20.95), as at 19 August 2025.

Speaking on the acquisition, James Shea, chief executive of P&C at Sompo, 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.

“We look forward to welcoming the team from Aspen as we bring our organisations together, recognising that the property [and] casualty market continues to value platforms that can underwrite and manage capital and risk at scale – and with exceptional skill.”

Mark Cloutier, group executive chairman and chief executive at Aspen added: “Sompo is a highly regarded brand and through this process, it has become clear that [it represents] a long-term owner for Aspen that respects our business and shares our values and ethos.

“This transaction represents an excellent outcome for Aspen and our shareholders, while Sompo’s scale and capital strength will create significant opportunities for our customers, trading partners and colleagues.

“The significant 35.6% premium to our unaffected share price reflects the quality Sompo sees in our team, the depth of the group’s distribution relationships and the strength of the franchise that we have built across insurance, reinsurance and Aspen Capital Markets.

“We look forward to sharing more details as we work towards completion, while maintaining our focus on continuing to deliver great service and products for our customers.”