Upheaval in the domestic insurance industry continues as Nippon Life Insurance Co., Mitsui Marine & Fire Insurance Co. and Sumitomo Marine & Fire Insurance Co. plan to form alliances in areas including product distribution and computer system development.
The three insurers are eyeing eventually forming a comprehensive insurance group covering both life and nonlife insurance products, sources close to the companies said Sunday.
A formal announcement on the matter will be made in the coming days, the sources said. Nippon Life is the nation’s top life insurer, while Mitsui and Sumitomo are Japan’s third- and fourth-largest nonlife insurers.
Nippon Life issued a statement saying that “various forms of cooperation” were currently being debated among the firms, but that no final agreement had yet been reached. An announcement would be made as soon as the contents of the talks are concrete, it added.
Nippon Life said that the talks also include Dowa Fire & Marine Insurance Co., a member of the Nippon Life group. Mitsui and Sumitomo issued similar statements later in the day.
The three insurers are moving to strengthen their businesses and streamline their operations in response to alliance plans announced by their rivals, the sources said.
Under the plan, the insurers will mutually market each other’s products. Products developed by Mitsui and Sumitomo, which plan to merge in October 2001, will be sold by a Nippon Life subsidiary to be launched in April, the sources said.
A subsidiary of the Mitsui-Sumitomo alliance will market products developed by Nippon Life. The three are also considering jointly setting up a subsidiary to develop a common computer system for their sales forces, the sources said.
Nippon Life posted 5.81 trillion yen in premium income in fiscal 1999, which ended in March 2000. Its assets totaled 43.21 trillion yen at the end of March. It has 71,434 employees. Mitsui registered 599.4 billion yen in premium income in fiscal 1999, with its assets amounting to 2.96 trillion yen at the end of March. It has 7,416 employees.
Sumitomo earned 542.9 billion yen in premium income in fiscal 1999, and its assets stood at 2.98 trillion yen at the end of March. It has 7,460 employees.
The move followed the September announcement by Tokio Marine & Fire Insurance Co., Nichido Fire & Marine Insurance Co. and Asahi Mutual Life Insurance Co. that they will form a comprehensive alliance with a view to integrating their operations in the future.
Tokio Marine is Japan’s largest nonlife insurer, while Nichido ranks seventh among nonlife insurers and Asahi fifth among life insurers.
Dai-ichi Mutual Life Insurance Co. and Yasuda Fire & Marine Insurance Co. said in August they will also form a comprehensive business alliance.
Dai-ichi ranks second among Japan’s life insurers and Yasuda second among nonlife insurers.
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