Daido Life Insurance Co. converted itself from a mutual firm into a stock company Monday, becoming the first Japanese life insurer to go public.
Daido was listed on the first sections of the Tokyo Stock Exchange and the Osaka Securities Exchange. The stock initially fetched 320,000 yen on the TSE, compared with the initial public offering of 270,000 yen. It closed at 306,000 yen.
With 1.5 million outstanding shares, Daido's market capitalization on the TSE is 459 billion yen, based on the closing price.
The conversion, known as demutualization, is designed to increase the flexibility of business operations by building a system that capitalizes on the merits of a stock company, such as easier fundraising.
While most of the nation's life insurers are mutual organizations, many are considering becoming stock companies to help them survive harsh competition amid growing industry consolidation.
As policyholders are members of a mutual life insurer, conversion requires the company to allocate shares to them in accordance with their contributions to its assets.
Daido is set to integrate operations with Taiyo Mutual Life Insurance Co. under a holding company expected to be set up in 2003.
Taiyo Mutual also plans to become a share-issuing company in 2003.