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Struggling Asahi Mutual Life Insurance Co. said Thursday the number of new policy contracts in the 2001 business year is estimated to have grown 17 percent due to brisk sales of new products.

However, the outstanding balance of policy contracts is projected to have fallen by around 9 percent from a year earlier, after concerns about the insurer’s financial health increased policy cancellations, it said.

Unveiling a progress report on its restructuring programs, Asahi Mutual said it reduced its equity holdings by 800 billion yen, far more than the 500 billion yen originally planned.

As a result, it is estimated that securities appraisal losses at the end of the 2001 business year will come to 60 billion yen, down sharply from the previously projected 470 billion yen, it said, adding it has also shed 160 billion yen in real estate holdings.

Asahi Mutual’s solvency margin ratio, a key gauge of insurers’ ability to pay out policy obligations, was estimated at around 445 percent as of the end of the 2001 business year, almost unchanged from the end of September, the company’s report says.

The industry considers a ratio of 200 percent to be the minimum level for healthy life insurers.

Asahi Mutual said its key gauge of profitability, known as basic profit, is projected to have grown by about 150 billion yen since the end of September due to a boost in the insurer’s foundation fund, which is the equivalent of capital for ordinary firms.

The insurer said it plans to release its earnings report for fiscal 2001 in June.

Asahi Mutual also said it has already cut 860 of the 2,255 jobs it plans to cut by next April. As of this month, Asahi Mutual had 6,255 employees.

Concerns about Asahi Mutual’s viability have deepened since January, when a plan to integrate operations next March with a subsidiary of Tokio Marine & Fire Insurance Co. was scrapped.

But the two insurers said they will continue to pursue an overall consolidation program and integrate the management of Tokio Marine and Asahi Mutual with two other companies around 2004 under Millea Holdings Inc.

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