Andrew Bary

Talk about a Buffett bounce.

Shares of Tokio Marine Holdings are up 35% since the big Japanese property and casualty insurer said early Monday that Berkshire Hathaway would take a 2.5% stake that was initially valued at $1.8 billion.

That interest in Tokio Marine, some 48.2 million shares, is now worth about $2.4 billion, a gain of $600 million, marking one of the largest immediate gains for any equity investment in percentage terms by Berkshire in the past decade.

Tokio Marine's U.S.-listed shares (TKOMY) gained 12.5% Wednesday to $50.25 and have risen 35% since the deal was announced. Berkshire plans to be a longtime holder of Tokio Marine and could increase its stake to 9.9% without the need for approval by the Tokyo-based insurer.

Tokio Marine is well-regarded industrywide, with high returns and a strong position in the Japanese market, but its stock could be ahead of itself.

The company now is valued at almost three times book value and 15 times projected 2026 earnings. That compares with Chubb, a top U.S. P&C insurer, which is valued at 12 times estimated 2026 earnings and less than twice book.

Berkshire and Tokio Marine announced a partnership that involved Berkshire's National Indemnity reinsurance unit absorbing some of the Japanese insurer's risks through a quota share agreement and what the companies called a "long-term strategic relationship."

Berkshire insurance chief Ajit Jain played a key role in the negotiations and Chairman Warren Buffett likely was involved as well. Buffett is well-regarded in Japan and he spearheaded Berkshire's investment in five Japanese trading companies that were worth about $35 billion at year-end 2025.

Berkshire is the world's largest P&C insurer by capital. Buffett is a student of the global P&C insurance industry and likely has followed Tokio Marine for many years.

Investors have reacted very favorably to the Berkshire/Tokio Marine news even though one analyst didn't see much immediate financial benefit to Tokio Marine.

The investment community appears to view Berkshire's investment as a vote of confidence in Tokio Marine, which is the largest nonlife insurer in Japan and in the top 10 globally based on market value with a current market capitalization of almost $100 billion. The company is one of three that dominate the Japanese nonlife insurance market. Tokio also gets about half its premium revenue outside of Japan, mostly in the U.S., where it has made several acquisitions.

"Financially the strategic alliance with BRK seems to change little," wrote KBW analyst David Threadgood. "Strategically, the partnership may help mitigate reinsurance volatility and give TMH some additional M&A firepower."

Write to Andrew Bary at andrew.bary@barrons.com

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March 25, 2026 17:34 ET (21:34 GMT)

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