Japan’s third largest p/c insurer, Mitsui Marine and Fire Insurance Co., has bowed out of an alliance agreement announced in October with Nippon Fire and Insurance Co. and Koa Fire and Insurance Co.
The cause of the breakdown in negotiations to create Japan’s largest non-life insurance company involves the complicated relationships between Japanese companies and their banking relations, known as keiretsu. In this case Mitsui apparently couldn’t reconcile the conflicts inherent in its established ties with Sakura Bank, with Nippon and Koa’s ties to rival Sanwa Bank.
According to a report by Reuters, Mitsui found another more congenial tie-up with Japan’s fourth largest p/c insurer, Sumitomo Marine & Fire Insurance. Banking ties won’t affect the deal, as Sakura and Sumitomo Bank plan to merge their operations by the year 2002.
The new insurer would become Japan’s largest, putting pressure on other companies to consolidate.
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