Nippon Life Insurance Co. has been in talks with Resona Holdings Inc. to boost its investment in the Japanese banking group by tens of billions of yen, sources close to the matter said on Friday.
The tie-up is expected to boost the sale of the insurer’s products at Resona branches, the sources said. Nippon Life would buy Resona’s treasury shares.
Nippon Life had been outstripped by rival Dai-ichi Life in terms of premium revenue, which corresponds to sales at nonfinancial companies, in the fiscal first half ended in September, losing its position as Japan’s biggest life insurer for the first time.
The result was due largely to Dai-ichi Life’s brisk sales at affiliated banks, the sources said.
Nippon Life is unlikely to regain the top spot in the full year through March. The firm has been seeking to strengthen cooperation with the banking industry as Dai-ichi has been boosting insurance sales especially through bank branches.
Separately, Dai-ichi Life Insurance Co. is considering raising its stake in Resona from the current 2.37 percent.
Resona concluded an alliance with Dai-ichi in 2007. The envisaged deal with Nippon Life will help the banking group sell more products from the top two insurers in Japan.
Resona believes that it can strengthen its financial base if Nippon Life and Dai-ichi buy some of the 130 million shares that the banking group bought back chiefly from the government in order to repay public funds it received in the past.
Resona will announce its new reconstruction program as early as March, including its strategy after repaying public funds.
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