Tokio Marine will buy US-based HCC Insurance Holdings for $US7.5 billion ($9.68 billion) as part of a continuing acquisition drive.

It is the Japanese insurance giant’s biggest acquisition since 2012, when it bought the Delphi Financial Group. It will pay $US78 ($100.69) in cash per share through subsidiary Tokio Marine & Nichido Fire Insurance.

Texas-based HCC offers property and casualty and accident and health cover, including US medical stop-loss insurance and short-term medical cover.

It has coverage in 130 countries, including operations in the UK and Spain.

Tokio Marine says the deal will increase the portion of profits it earns overseas to 46% from 38%, and the transaction is expected to complete in the fourth quarter.

“In line with the strategy to expand our international business, the acquisition enables Tokio Marine to build a more diversified and highly profitable global portfolio with low volatility, taking into account the nature of HCC’s businesses, which are largely non-correlated, have limited catastrophe exposure and are less dependent on property and casualty market cycles,” Tokio Marine President Tsuyoshi Nagano said.

The acquisition enhances Tokio Marine’s operations in the US and brings product offerings in new lines, including accident and health, directors’ and officers’, agriculture and other specialty areas.

Mr Nagano says the price is “high but appropriate” given HCC’s profitability and range of more than 100 types of specialty insurance products. HCC board members will remain in place.

Moody’s says it may upgrade HCC’s Baa1 senior debt rating following the sale, because Tokio Marine & Nichido Fire Insurance is rated higher and will provide support to HCC’s creditors.

Earlier this month ratings agency Fitch said Japanese insurers are seeking external sources of growth, especially investments in assets such as high-grade foreign bonds, to make up for sluggish growth at home.

Tokio Marine’s Australian COO Claudio Saita told insuranceNEWS.com.au there will be no impact on Australia, because HCC has no local office.