Insurance giants Tokio Marine has agreed to buy up a US firm for $7.5 billion.

Tokio Marine Holdings’ subsidiary Tokio Marine and Nichido Fire Insurance Co have agreed terms with HCC, a Texas-based insurance holding company.

Tokio — which operates Tokio Millenium Re in Bermuda — paid $78 a share, a 37.6 per cent premium on the closing price on Tuesday.

Tokio Marine president Tsuyoshi Nagano said: “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.

“HCC is a top tier specialty insurer with market-leading underwriting capabilities.

“Leveraging Tokio Marine’s financial strength and global footprint, HCC will further expand the revenues, profits and capabilities of Tokio Marine.”

HCC covers property and casualty, accident and health and other specialty insurance businesses.

Company president Christopher Williams said: “With Tokio Marine, HCC gains an international footprint to expand our diverse portfolio and expertise globally, a financial foundation on which to compete with larger insurers and the opportunity to offer our clients expanded coverages.”

Mr Nagano added: “Tokio Marine has great respect for the constant profitability that HCC has achieved under the leadership of its highly experienced management team. With shared values and the continued support from the management team, we will build a long and successful partnership together.”