Thursday’s start of fiscal 2010 marks the conclusion of mergers of more then 10 major Japanese firms seeking to cut costs and enhance their competitiveness since the economic crisis that hit two years ago.
The nonlife insurance industry saw large-scale realignment as five major players integrated into two large groups to vie with Tokio Marine Holdings Inc., which before Thursday was the leader.
Mitsui Sumitomo Insurance Group Holdings Inc. integrated with Aioi Insurance Co. and Nissay Dowa General Insurance Co. under MS&AD Insurance Group Holdings Inc., topping Tokio Marine in terms of net premium revenues.
As Aioi Insurance and Nissay Dowa are set to merge into Aioi Nissay Dowa Insurance Co. in October, MS&AD will own two major full-service nonlife insurers — Mitsui Sumitomo Insurance Co. and Aioi Nissay Dowa. A merger of the two subsidiaries is seen as a future option.
Separately, Sompo Japan Insurance Inc. and Nipponkoa Insurance Co. integrated operations under NKSJ Holdings Inc. to become the industry’s third-largest player. Their life insurance units are scheduled to merge in October 2011.
As a result, the number of major players in Japan’s nonlife insurance industry has shrunk from six to three. The top three groups are expected to expand into growing overseas markets.
Oil industry leader Nippon Oil Corp. and Nippon Mining Holdings Inc. integrated into JX Holdings Inc., bringing together their strengths to survive intensifying competition.
The new group is expected to reduce oil-refining capacity due to sluggish domestic demand for petroleum products while regrouping operations into three divisions — oil refining and sales, oil field development, and metals.
Meanwhile Renesas Technology Corp. and NEC Electronics Corp. merged into Renesas Electronics Corp., the world’s No. 3 chip maker.