Challenger will extend its reinsurance partnership with Mitsui Sumitomo Primary Life Insurance Company.

Its Challenger Life business will continue to receive a quota share of reinsurance across Australian dollar, US dollar and Japanese yen-denominated annuities issued in Japan by Mitsui from July 1.

Mitsui will provide annual reinsurance of at least ¥50 billion ($500 million) for the next five years, subject to review in the event of a material adverse change for either party.

Challenger Life will also support Mitsui Sumitomo Primary with any new reinsurance requirements the Japanese partner may have.

Challenger CEO and MD Nick Hamilton says the partnership extension “reflects the strong, collaborative and mutually beneficial relationship” the two companies have developed.

“The arrangement that we’re announcing ... also supports our focus on longer-duration annuity business with the objective of improving the quality of [our] annuity book growth and driving stronger returns,” he said.

Since November 2016, Challenger Life has partnered with Mitsui, an annuities provider in Japan, to reinsure Australian dollar annuities. The arrangement subsequently expanded to include US dollar and Japanese yen-denominated annuities.

Mitsui is a subsidiary of MS&AD Insurance Group Holdings, which holds 15% of Challenger’s issued share capital and under a long-term strategic relationship has representation on the board.