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(Bloomberg) -- Dai-ichi Life Holdings Inc. said a US subsidiary agreed to transfer insurance blocks totaling about $9.7 billion in policy reserves to a reinsurance firm to improve earnings.

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Protective Life Corp., a wholly owned Dai-ichi Life unit based in Birmingham, Alabama, has decided to cede the blocks to reinsurance firm Resolution Life Group Holdings Ltd., Dai-ichi said in a statement. The group expects an improvement in its adjusted profit of around $30–40 million over the medium to long term as a result of the transaction, the Tokyo-based insurer said.

Reinsurance companies affiliated with investment firms such as KKR & Co. in the US are increasing the number of contracts they are underwriting to put more of their funds in higher-returning assets in Japan. New capital regulations for insurers in Japan are scheduled to start in the fiscal year beginning April, and companies in the sector are trying to lighten their financial burden by carving out some of their contracts.

At the same time, Japan’s life insurers are renewing their drive for acquisitions at home and abroad after a lull following a string of multi-billion-dollar deals a decade ago. Resolution Life is slated to be brought under the umbrella of Nippon Life Insurance Co. by the second half of 2025.

In the deal with Resolution Life, assets related to the contract will remain with Protective Life, but income and expenses including investment gains and losses will be transferred to the reinsurance firm.

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