Tokio Marine Holdings has agreed to buy HCC Insurance Holdings for about $7.5 billion in the biggest acquisition by a Japanese insurer, stepping up an overseas expansion to counter stagnation at home.

Tokio Marine will pay $78 in cash a share for HCC, based in Houston, Texas, according to a statement yesterday, a 37.6 per cent premium to the latest closing price.

Before the latest deal, Tokio Marine had made $8.8 billion of purchases in North America, according to data. The biggest was the 2008 purchase of Philadelphia Consolidated Holding, valued at $4.6 billion.

HCC, founded in 1974, has assets totalling $11 billion, according to its website. The firm sells policies that protect corporate officers against lawsuits, guard against aviation losses and pay out when crops are damaged. – (Bloomberg)