Struggling Asahi Mutual Life Insurance Co. announced Friday it has scrapped plans to team up with the Millea Insurance Group, saying it may look for another partner.

With Asahi Mutual’s planned transformation into a stock company cited as a prerequisite for the merger, the ongoing stock market slump has thus far rendered this development infeasible, the firm said in a statement.

Asahi Mutual President Yuzuru Fujita told a news conference the insurer will instead opt to pursue unilateral restructuring efforts for the time being.

“We have no special obligation to the Millea group,” Fujita said.

While consolidation with firms outside the Millea group is a future possibility, no specific plans exist at present, he added.

This latest announcement follows a stream of revisions to Asahi Mutual’s long-term strategy.

The firm was originally meant to join the Millea group, which was formed in April with Tokio Marine & Fire Insurance Co. and Nichido Fire & Marine Insurance Co. as its core members, in 2004. These consolidation plans were then moved up to April, before being postponed again in January 2002, with a union again planned for 2004.

“The decision to join Millea and seek fusion with nonlife insurers was not a mistake,” remarked Fujita. “But the business climate has changed tremendously, and my responsibility now is to overhaul our revenue structure and to make clear what our new business course will be.”

The company will try to increase its profit from selling and maintaining policies by 38 percent from a projected 65 billion yen in 2002 to 90 billion yen in 2005.

The firm will look to generate this extra profit by intensifying its focus on policy sales to individuals rather than businesses, focusing on nursing care coverage, and emphasizing sales workers’ ability to increase revenue through customer loyalty, Asahi Mutual said.

Overall revenue from insurance premiums will fall, however, dropping 9 percent from a projected 770 billion yen in 2002 to 700 billion yen in 2005, Fujita said.

Mirroring the rest of the sector, the firm is suffering amid the declining stock market, sluggish demand for conventional life insurance policies, and a shortfall in investment returns against payouts promised to policyholders.

Asahi Mutual, whose unrealized losses on stockholdings were close to 300 billion yen at the end of September, was widely perceived to have taken shelter with its more financially solid noninsurance counterparts.

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