LONDON—Japan's Mitsui Sumitomo Insurance Company is to buy U.K. insurance company Amlin PLC for £ 3.47 billion ($5.3 billion), in the latest move by a Japanese insurer to expand overseas.

Mitsui said it would pay 670 pence a share for Amlin, which provides insurance cover to organizations and reinsurance protection to other insurance companies. Amlin shareholders will also be entitled to an 8.4 pence a share dividend set to be paid on Oct. 1.

Amlin operates in the Lloyd's of London insurance market, where specialist insurance companies group together in syndicates to provide risk cover.

Mitsui Sumitomo is a subsidiary of Japan-listed nonlife insurance specialist MS&AD Insurance Group Holdings Inc.

The deal is the latest example of how Japanese insurers—both nonlife and life—are aggressively expanding overseas because of the declining population and sluggish car sales at home.

In July, Japan's largest nonlife insurer agreed to buy U.S.-based HCC Insurance Holdings Inc. for $7.5 billion.

For Mitsui Sumitomo Insurance, the acquisition marks its first purchase in the West after investing in local insurers in Southeast Asia.

Write to Rory Gallivan at rory.gallivan@wsj.com and Atsuko Fukase at atsuko.fukase@wsj.com

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(END) Dow Jones Newswires

September 08, 2015 02:55 ET (06:55 GMT)

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