Millea Holdings Inc. plans to make midsize nonlife insurer Nisshin Fire & Marine Insurance Co. a wholly owned subsidiary by the end of the year by acquiring all of its outstanding shares in a stock swap, Millea Holdings sources said Friday.
The boards of both Millea Holdings and Nisshin Fire will approve the plan at separate meetings later in the day and make an announcement.
Japanese casualty insurers have had difficulty increasing revenue from automobile policies, which are usually the largest source of profit for most nonlife insurers.
Millea Holdings thus decided to acquire Nisshin Fire, which has expertise in selling auto insurance policies to drivers and small and midsize firms, the sources said.
Millea Holdings has the nation’s largest nonlife insurer, Tokio Marine & Nichido Fire Insurance Co., under its wing and also has a roughly 30 percent stake in Nisshin Fire, which has a business tieup with Millea.
Millea Holdings is aiming to put the two nonlife insurers under its umbrella after taking full control of Nisshin Fire but is not planning to have Tokio Marine and Nichido Fire conduct an outright merger, they said.
Nisshin Fire is expected to be delisted from the first section of the Tokyo Stock Exchange after Millea Holdings makes it a subsidiary.
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