In the latest round of consolidation in the insurance sector, Tokio Marine & Fire Insurance Co., Asahi Mutual Life Insurance Co. and Nichido Fire & Marine Insurance Co. announced Monday they have agreed to a comprehensive tieup, with a view toward integrating their management in the future.
|Yuzuru Fujita (left), president of Asahi Mutual Life Insurance Co., Kokei Higuchi (center), president of Tokio Marine & Fire Insurance Co., and Takashi Aihara, president of Nichido Fire & Marine Insurance Co., shake hands during a news conference Monday to announce their tieup.|
The three companies will bring together a total of 90,605 sales representatives and 29,623 sales offices to form the industry’s largest sales network.
But when and in what form the alliance will take place remains on the drawing board, said Kokei Higuchi, president of Tokio Marine.
“I think ultimately, we will consolidate management under a joint holding company,” Higuchi said, adding that to do so, Asahi Mutual must first become a joint stock company.
Higuchi, Yuzuru Fujita, president of Asahi Mutual, and Takashi Aihara, president of Nichido Fire, will head a committee to decide what the common goals and strategies of the three firms should be.
Employees from each company will also meet in subcommittees to create new products and services, establish new marketing channels and address other issues before hammering out a schedule for the tieup.
The three companies will cooperate to jointly develop products that combine life and property insurance for individuals and small to medium-size firms, officials said. They will also seek entry into the market for so-called third-sector products, which include medical, nursing care and cancer insurance — products that do not fall under the conventional life and property insurance categories.
The officials have declined to announce concrete ideas for their new products.
“We would like to announce the details, including a schedule (on when the alliance will take place) by year’s end,” Higuchi said.
The announcement comes shortly after Dai-ichi Mutual Life Insurance Co. and Yasuda Fire & Marine Insurance Co. announced a comprehensive tieup in late August. Observers say the alliance between the No. 2 life and nonlife insurers helped hasten the three-way alliance.
Tokio Marine is the leader in the property insurance field, with gross assets of almost 5.69 trillion yen, while Nichido Fire is ranked seventh with 1.78 trillion yen. Asahi Mutual is fifth among life insurers, with gross assets totaling 11.3 trillion yen.
Tokio Marine is part of the Mitsubishi group, while Asahi Mutual and Nichido Fire are members of the Mizuho Financial Group, which will be set up on Sept. 29 through the integration of Dai-Ichi Kangyo Bank, Fuji Bank and the Industrial Bank of Japan.
“The era when (companies) in the same group bought each other’s products is over,” Higuchi said, citing intense competition following financial deregulation measures.
Tokio Marine declined to join the Mitsubishi Tokyo Financial Group, a holding company to be formed in April 2001 that will consolidate the Bank of Tokyo-Mitsubishi, Mitsubishi Trust & Banking Corp. and Nippon Trust Bank, a Bank of Tokyo-Mitsubishi subsidiary.
“We want to first become the most reliable group within the insurance industry,” Higuchi said.
Hino hails alliance
Financial Services Agency Commissioner Masaharu Hino on Monday hailed the announcement of the tripartite alliance.
“The three companies’ tieup, which crosses sector lines, is expected to provide more convenience to insurance policy holders,” Hino told a news conference, expressing hope that it will further promote the nation’s financial deregulation.
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