In a bid to incorporate insurance products into its credit card business, Credit Saison Co. will acquire stocks in two insurance firms set up jointly by Japanese and U.S. businesses.
The major credit card issuer will obtain a quarter of the stocks in Allstate Automobile & Fire Insurance Co. and Saison Life Insurance Co. later this month, with an eye on the "Big Bang" financial deregulation, officials from concerned companies announced Wednesday at a joint news conference.
As a result, Allstate International Inc., an American insurance firm currently involved in the joint ventures, will give up all its Saison Life stocks and reduce its holdings in Allstate Automobile & Fire Insurance from 50 percent to 5 percent.
The Saison group, which includes Credit Saison and Seibu Department Stores, Ltd., will in turn gain almost complete control of the two insurance firms.
The nonlife insurance subsidiary will continue to receive assistance from Allstate International in insurance rating and product creation.
The equity transfer deal was initiated by Credit Saison, which already provides its card members with services in travel and stocks. The firm wanted to strengthen its services in the insurance business to exploit the ongoing deregulation, officials said.
In addition, the joint venture firms have experienced problems in slow decision-making due to the language barrier and other factors, according to officials. Most executives of both firms will be replaced by personnel from the Saison group.