Millea to Fully Integrate Nisshin Fire

May 22, 2006

In a further move towards consolidation in the Japanese P/C industry, the country’s largest insurance group, Millea Holdings, Inc., announced that it has agreed to fully integrate Nisshin Fire & Marine Insurance Co., one of its main operating subsidiaries.

Millea would acquire Nisshin’s outstanding shares in a straight “stock-for-stock exchange,” effective on September 30, 2006, subject to the approval of Nisshin shareholders. The integration aims to “further develop the alliance between the two companies and to strengthen the property and casualty insurance business of Millea Group, Millea Holdings and Nisshin Fire,” said the bulletin.

It also noted that Nisshin Fire and Tokio Marine & Nichido Fire Insurance Co., Ltd., a wholly owned subsidiary of Millea, “had maintained a close relationship and entered into a business-alliance and capital-affiliation agreement on March 19, 2003. With respect to their capital affiliation, Tokio Marine & Nichido acquired approximately one-third of the outstanding shares of Nisshin Fire on February 23, 2005. As part of their business alliance, the two companies have collaborated in marketing operations and have shared or jointly used their resources in the areas such as insurance product development, business process and information technology.”

Plans call for Nisshin to continue to pursue its existing retail business strategy as an insurance company focusing on the retail business within Millea Group. “In addition, with the backing from other Millea Group companies, Nisshin Fire will pursue to enhance reliance from clients and achieve sustainable growth,” said the bulletin.

Although the companies will continue to operate indepedently, “Tokio Marine & Nichido will accelerate its business cooperation with Nisshin Fire in order to facilitate the success of Nisshin Fire’s retail business strategy.”

The Millea Group’s overall intentions are to “make full use of the two companies’ strengths and pursue client-oriented operations in order to further meet the needs and demands of general clients and insurance agents. Accordingly, Nisshin Fire and Tokio Marine & Nichido will aim to achieve a sustainable business growth and expand their combined earnings, thereby enhancing the overall corporate value of Millea Group.”

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