Tokio Marine is to buy Philadelphia Consolidated, a midsize US non-life insurer, for $4.7bn in the second largest acquisition by a Japanese company this year.

Japan’s largest non-life insurance group is to pay $61.50 a share in cash, a 67 per cent premium over Nasdaq-listed Philadelphia’s average share price over the past year. Philadelphia ranks about 50th in the US non-life insurance market by size but Tokio Marine said it was extremely profitable, ranking 19th among 117 non-life insurers in the US in terms of net profits and fourth in terms of return on equity.