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| The Insurance Industry |
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| Current State |
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| Integration of Nonlife Insurance Companies Progresses Rapidly |
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Sales brochures of competing insurance companies |
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While Japanese life insurance companies are beginning to climb out of the critical state it found itself in, the combined total individual life insurance in force of the nine major life insurers for the fiscal year ended March 2004 was still down 5.6 percent from a year earlier. This marked the seventh consecutive year of decline, showing that a shift away from life insurance still continues. Meanwhile, although all nine major nonlife insurance companies and groups were in the black in FY2003 due to rising shareprices, their income from premiums fell, and they are concerned about the ceiling that has been hit in the market as a whole. |
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Like other financial services sectors, the life insurance and nonlife insurance industries found themselves within the scope of financial deregulation. The consolidation of insurance companies has progressed rapidly in the past 10 years and was especially marked within the nonlife insurance sector.
Tokio Marine and Fire Insurance Co., Ltd., the largest nonlife company in Japan, and Nichido Fire and Marine Insurance Co., Ltd. integrated their operations and established Millea Holdings, Inc. in April 2002, becoming wholly owned subsidiaries of the holding company. Subsidiaries Tokio Marine Life Insurance Co., Ltd. and Nichido Life Insurance Co., Ltd. later also came under the Millea Holdings umbrella (now merged as Tokio Marine & Nichido Life Insurance Co., Ltd.). Tokio Marine merged with Nichido Fire in October 2004 resulting in the birth of Tokio Marine & Nichido Fire Insurance Co., Ltd.
Meanwhile, Yasuda Fire and Marine Insurance Co., Ltd. merged with Nissan Fire & Marine Insurance Co., Ltd. and established Sompo Japan Insurance Inc. An additional merger with Taisei Fire and Marine Insurance Co., Ltd. gave Sompo Japan the No. 2 position in the industry. Mitsui Marine and Fire Insurance Co., Ltd. and Sumitomo Marine and Fire Insurance Co., Ltd., two zaibatsu-affiliated companies, merged to form Mitsui Sumitomo Insurance Co., Ltd. which now holds the No. 3 spot in the industry. |
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