Failed insurer Chiyoda Mutual Life Insurance Co. started anew Friday as AIG Star Life Insurance Co., with regaining customer confidence as the first order of business.
“Our staff will work together to rebuild the company and make sure we will never put a burden on our customers again,” President Seiki Tokuni said at a news conference.
The reborn entity, capitalized at 30 billion yen, will push ahead with its rehabilitation program under the sponsorship of parent American International Group.
With total assets of 2.3 trillion yen, AIG Star is AIG’s largest subsidiary worldwide. It starts with about 2.3 million policyholders, after roughly 370,000 contracts, or 16 percent, expired during the six months since Chiyoda Mutual’s collapse in October.
Under a special rehabilitation law designed for insurers, Chiyoda Mutual’s promised rates of return on savings-type policies, such as endowment and individual pension insurance, were reduced from an average 3.7 percent to 1.5 percent.
“In the short-term, we must pull business forward by offering new products . . . and help regain public trust by explaining how our services are different from those of Chiyoda Mutual,” said Tokuni.
AIG Star starts operations with 8,479 employees and 418 branch offices, and joins American Life Insurance Co. (Alico) Japan to become AIG’s second life insurance unit in Japan.
AIG Star and Alico will be “friendly competitors” with slightly different target markets, said Donald Kanak, President and CEO of AIG Companies in Japan and Korea.
“Chiyoda had a much bigger presence (than Alico) in the corporate market and group insurance market. We’d like to see that presence rebuilt and made stronger and continue to grow,” Kanak said.
Nisshin, St. Paul tie
Nisshin Fire & Marine Insurance Co. said Friday it will tie up with St. Paul Companies Inc. of the United States in the insurance business.
Under the alliance, the U.S. insurance group will provide the medium-ranked Japanese nonlife insurer with knowhow on product development and related services, the company said.
It said the two will cooperate on employee and agent training and insurance services to each other’s customers in each country.
The deal will allow Nisshin to beef up its product development capability and offer St. Paul a chance to strengthen its business base in Japan.
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