Yoshiteru Yoneyama, nominated as president of Fukoku Mutual Life Insurance Co., said in a recent interview the company will pursue an independent business strategy instead of demutualizing like Dai-ichi Life Insurance Co., which became a publicly traded firm April 1.
"A stock company is pressured by shareholders to turn in a good earnings performance in a short period of time, but (such a corporate governance-style) doesn't suit life insurers" that sell policies of long duration and have to devise a management strategy from a longer-term perspective, Yoneyama said.
"We will remain a mutual company that has no shareholders and is able to manage itself with a steady hand," the 59-year-old Yoneyama said.
He is currently director and managing executive officer and is due to become president July 2 at a board meeting following a meeting of representatives of policyholders.
Asked whether Fukoku will tie up with any other firm, Yoneyama said, "Over the course of its history, Fukoku has been independent and has had no ties with zaibatsu," meaning that the company is not considering forging any business alliance.
Yoneyama said he is aware of the challenges facing Japan's life insurance market due in part to the declining population. He acknowledged the market is contracting and said life insurers are still struggling to pay out yields to policyholders, which were set during the days of the bubble economy in the late 1980s and early 1990s and are higher than the actual returns on investment.
Despite the difficult market conditions, he noted that foreign and other companies are still entering the business.