August
2007
Japanese Insurance Firms Look To Asian Nations For
Growth
With their domestic market shrinking amid a declining population, Japan's
life and nonlife insurers have begun accelerating their advance into Asia,
where the economies and the populations are both growing. The companies
make the advance in three phases -- setting up a resident office, opening
branches, and establishing a subsidiary or a joint venture-- by closely
observing the situation in each region where they seek to develop their
business. By the end of this year, the insurers will establish about 10
business strongholds in China and Southeast Asia. Nippon Life Insurance
Co. set up a resident office in Singapore in April with the ultimate goal
of advancing into other Southeast Asian countries. Nipponkoa Insurance Co.
also set up a resident office in India in June. In China, the Japanese
insurers have begun opening branches. Aioi Insurance Co. opened a branch
in June in Tianjin, where parent company Toyota Motor Corp. and many
related companies have production bases. Sompo Japan Insurance Inc., which
already has a subsidiary in Dalian, plans to open a branch in Shanghai in
September and expand its business operations. Sumitomo Life Insurance Co.
aims to open branches in every major city in China by the end of the year.
Dai-ichi Mutual Life Insurance Co. acquired an insurer in Vietnam in
January that now operates as Dai-ichi Vietnam Life Insurance Co., Mitsui
Sumitomo Insurance Co. will upgrade its Shanghai office into a subsidiary
this winter and plans to make branches out of resident offices in other
parts of China. Japan's insurance companies likely will continue the rush
to advance into Asia, with their sights set not only on China and India
but also on Malaysia, Thailand and Vietnam. (The Nikkei Financial Daily,
August 15, 2007)
April
2006
Stocks of Big Banks, Life Insurers Hit Y22tln In
Paper Profits
Combined unrealized profits on the shareholdings of the six major banking
groups and nine leading life insurance companies reached roughly 22
trillion yen as of March 31, double that of the previous year. According
to estimates by Dai-ichi Life Research Institute, the six major banking
groups -- Mizuho Financial Group Inc., Sumitomo Mitsui Financial Group
Inc., Mitsubishi UFJ Financial Group Inc., Resona Holdings Inc., Sumitomo
Trust & Banking Co., and Mitsui Trust Holdings Inc. -- had a combined
paper profit of some 8.4 trillion yen at March 31, up 110%. "For
every gain of 1,000 points on the Nikkei Stock Average, unrealized profits
(at the banks) jump by some 1.2 trillion yen," says Hideo Kumano, a
senior economist at Dai-ichi Life Research. Climbing stock prices have
resulted in improved finances at the banks. Each banking group had
consolidated capital adequacy ratios between 9% and 12%, well above the 8%
threshold necessary to conduct international operations. Meanwhile, the
nine major life insurers saw combined unrealized gains of about 13.5
trillion yen. This is more than double the roughly 6 trillion yen recorded
at the end of fiscal 2004 and marks a 15-year high. Since slipping into
the red at the end of fiscal 2002, unrealized profits have shot up on the
back of the recovery in the stock market. Industry leader Nippon Life
Insurance Co. had paper profits of more than 5.8 trillion yen, nearly
double the 3 trillion yen at the close of the previous fiscal year.
Unrealized profits at Dai-ichi Mutual Life Insurance Co. topped 2.8
trillion yen and were around 900 billion yen at Sumitomo Life Insurance
Co. Both tallies ballooned two to three times on the close of fiscal 2004.
Asahi Mutual Life Insurance Co., which shifted to a paper profit last
fiscal year with 14.1 billion yen, increased its unrealized gains to about
22 billion yen. (The Nihon Keizai Shimbun, April 01, 2006)
