Shares of Tokio Marine Holdings, Japan's largest property and casualty insurer, have soared nearly 25% in less than a month after Warren Buffett, the legendary investor, disclosed a massive stake in the company. Korean retail investors in Japanese stocks — known as "ilhak gaemi" — have piled into the stock with explosive buying momentum.
Shares Jump 25% After Buffett Disclosure; Korean Retail Investors Rush In
Tokio Marine Holdings closed at 7,277 yen on the Tokyo Stock Exchange on Wednesday, down 0.42% from the previous session. However, the price represents a 24.76% surge from the 5,857 yen closing price on May 23, the day Buffett disclosed his investment.
Buffett invested $1.8 billion (approximately 2.7 trillion won) to acquire a 2.49% stake in Tokio Marine Holdings. He also reportedly secured the right to increase his holding to as much as 9.9%. As news of the large-scale strategic bet spread, Korean retail investors quickly followed suit.
According to the Korea Securities Depository's SEIBro system, Tokio Marine Holdings had ranked outside the top 50 in net purchases of Japanese stocks by Korean investors by settlement value before Buffett's announcement. After the disclosure through Wednesday, approximately 8.3 billion won in net purchases flowed in, catapulting the stock to the No. 1 position.
The so-called "Buffett effect" has not been limited to Tokio Marine Holdings. Japan's five major trading houses, in which Buffett previously invested, have also re-entered the top ranks of net purchases by Korean investors.
"Not Just a Financial Stock but a Strategic Partner" — Hopes for Insurer Revaluation
Securities industry analysts largely believe Buffett chose to invest in Tokio Marine Holdings not as a simple financial stock but as a strategic partner.
"For Buffett, an insurer is not merely a profit-generating company but a capital engine that supplies long-term funding by utilizing the 'float' — premiums collected before claims are paid out," said Lee Chang-hee, a researcher at Samsung Securities.
What particularly draws attention is that unlike his investments in Japan's five major trading houses, where he spread his stakes evenly, Buffett selected only Tokio Marine Holdings this time.
"Tokio Marine Holdings possesses outstanding return on capital and an unrivaled track record of executing global mergers and acquisitions within Japan," Lee said. "From Berkshire Hathaway's perspective, this goes beyond a simple equity investment — they have chosen Tokio Marine as a strategic partner with whom they can find and execute good deals together."
The ripple effects of this investment appear to extend beyond Tokio Marine Holdings alone. Expectations are spreading for a broader revaluation of the entire Japanese insurance sector, including SOMPO Holdings, which has long been in a state of chronic undervaluation.
Lee characterized Buffett's move as "both a macro event that accelerates the elimination of the discount on Japanese insurance stocks as a whole, and a micro event that sharpens the differentiation between Tokio Marine Holdings — which exclusively captures the partnership premium — and other names in the sector."
Some market observers suggest that Korean retail investors' concentrated buying goes beyond simply "following Buffett." They view it as a strategic judgment that also factors in the potential for structural undervaluation across Japanese insurance stocks to unwind.
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