Deal sees Catlin get £85m for its stake in technology-based business.
Japanese insurer MS&AD has spent £105m on buying up 75.01% of Box Innovation Group, the holding company of telematics firm Insure The Box.
The remaining 24.99% of shares have been retained by the existing management of the Gibraltar-based business.
The deal has been structured through MS&AD-owned company Aioi Nissay Dowa Insurance Japan which in turn has a European subsidiary Aioi Nissay Dowa Insurance Europe.
Catlin Group will receive £85m in cash for its stake having first invested in the business in 2010.
The insurer announced that it will pay its shareholders the "surplus capital" from its investment with further details to follow in January.
The transaction is expected to be complete in the first quarter of next year.
In a statement MS&AD reported that it believed that technical evolution in the automotive sector and future mobility trends will lead to a strong increase in demand for connected car solutions and services over the next 10 years.
It continued: "Aioi Nissay Dowa Insurance Europe has core competences in motor insurance, automotive related insurance products and mobility solutions.
"The strong potential for future strategic growth and synergies has also helped underpin the acquisition of Box Innovation Group. In Japan, MS&AD has already developed various telematics based solutions and strongly believes in a longer term success story."
The statement also detailed that the Japanese insurer will manage Box Innovation Group as an integrated unit within its European operation and retain the existing leadership, technology and processes of the firm to try to develop offerings and partnerships across the continent.
Aioi Nissay Dowa Insurance Europe will also take over the underwriting of the main parts of Insure The Box's business.