Sumitomo Life Insurance Co. and casualty insurer Sumitomo Marine & Fire Insurance Co. are considering selling each other’s policies and jointly developing insurance products, officials of the two firms said Friday.
The two firms are already cooperating in the nonlife insurance sector, with Sumitomo Life’s nonlife insurance unit entrusting damage investigations and payout estimates to Sumitomo Marine.
So far, no formal agreement on joint sales and the development of specific products has been reached, but the two firms have expressed a willingness to further enhance their cooperation.
“Concerning the nonlife sector, we have seen steady performance results since April through cooperation with Sumitomo Marine,” Sumitomo Life said in a statement.
“In the life insurance sector, we have yet to reach a decision, but consideration is under way toward strengthening mutual cooperation,” the statement read.
Under a 1996 Japan-U.S. accord, major domestic insurers have been shut out of sales of third-sector products to promote access by foreign companies into the Japanese insurance market.
The move, if realized, would follow the deal struck last month by Dai-ichi Mutual Life Insurance Co. and Yasuda Fire & Marine Insurance Co. to sell each other’s products.
Dai-ichi also announced Thursday a tieup agreement with U.S. insurer American Family Life Assurance Co. to cross-sell and jointly develop products.
Insurer tieup detailed
Midsize nonlife insurers Dai-Tokyo Fire and Marine Insurance Co. and Chiyoda Fire and Marine Insurance Co. unveiled details Friday of their planned merger in April, which targets a staff reduction of almost 30 percent by 2002.
An estimated 2,900 of the 9,450 employees at the two companies will be reduced by 2002, which will cut personnel costs by about 11 billion yen, officials said.
The two companies further agreed to set the merger ratio at one to 0.9 in favor of Dai-Tokyo. One Chiyoda share will be exchanged for 0.9 Dai-Tokyo share, officials said.
Dai-Tokyo President Akira Seshimo will serve as president of the new firm, to be named Aioi Insurance Co., while the post of chairman will go to Chiyoda President Koji Fukuda.
Combined total assets of Dai-Tokyo, ranked seventh in the industry, and Toyota Motor Corp.-affiliated Chiyoda, ranked ninth, reached 2.83 trillion yen in fiscal 1999, creating the nation’s fifth-largest casualty and property insurer.
In the same fiscal year, the two companies’ premium revenue amounted to 806.7 billion yen, of which revenue from automobile insurance policies accounted for 570.6 billion yen.
“We mean to consolidate our position as a leader in automobile insurance through locally based service networks,” said Fukuda of Chiyoda.
In fiscal 2001, officials project that Aioi Insurance will earn 844 billion yen in premium revenue. It aims to boost revenue to 880 billion yen in fiscal 2002, officials said.
With the merger, Toyota’s ownership in Chiyoda will fall from 50 percent to around 20 percent of Aioi Insurance.
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