Japan Post Insurance may allocate as much as $2 billion into a new reinsurance sidecar established by Global Atlantic

Japan Post Insurance is exploring an investment of up to $2 billion in a new reinsurance co-investment vehicle, which will be sponsored by Global Atlantic Financial Group, a U.S.-based life, retirement, and annuities insurer and reinsurer.

The insurer expects to hold a majority stake—over 50%—in the vehicle, with a capital commitment ranging between $1 billion and $2 billion. This potential investment builds on an existing relationship formed in 2023, when Japan Post Insurance partnered with private equity giant KKR and Global Atlantic to invest in a previous reinsurance co-investment vehicle, believed to be a vintage of Global Atlantic’s Ivy Re sidecar.

Global Atlantic first introduced the Ivy Re sidecar structure in Bermuda in 2020, using it to bring in third-party capital to support large-scale life reinsurance transactions. Japan Post Insurance viewed this as an opportunity to expand into the growing global life and annuity reinsurance market while gaining access to diversified reinsurance-linked returns to enhance its portfolio.

Now, Japan Post Insurance is in talks to help fund a new vehicle Global Atlantic is expected to launch, which is likely to follow a similar Ivy Re-style structure. The insurer has signed a memorandum of understanding with KKR and Global Atlantic to begin discussions on this potential investment.

The new sidecar-like vehicle is anticipated to participate in Global Atlantic’s reinsurance business and could also pursue other strategic opportunities. Final terms are still under negotiation, and Japan Post Insurance expects to make a decision within the next three months, with the possibility of deploying capital by 2026.

The use of third-party capital through reinsurance sidecars and co-investment vehicles is becoming increasingly common in the life and annuity reinsurance space, as leading players seek to tap into investor demand for exposure to these markets through efficient investment structures.