MS&AD Insurance Group Holdings Inc. has announced plans to merge two of its non-life insurance subsidiaries, Mitsui Sumitomo Insurance Co. Ltd. and Aioi Nissay Dowa Insurance Co. Ltd. This move, revealed on March 28, aims to create a dominant player in Japan’s non-life insurance market.
For the past 15 years, Mitsui Sumitomo and Aioi Nissay Dowa have operated under the same parent company. They have already worked together on various strategies and risk management. Soichiro Makimoto, an analyst at Moody’s Ratings, noted that the merger is not expected to significantly affect their credit ratings. However, he believes it will enhance their integration, particularly in IT systems, which could lead to better profitability.
The merger comes as both companies face compliance issues. They, along with two other insurers, have been involved in scandals related to price-fixing and improper information sharing. To address these concerns, MS&AD plans to strengthen its governance by shifting to a company structure that includes an audit and supervisory committee. This change aims to improve oversight and internal controls.
The merger will need approval from shareholders at an upcoming annual general meeting. MS&AD expressed that the goal is to combine the strengths of both companies to better serve customers in the domestic non-life insurance market. They also plan to streamline operations, including integrating IT systems and optimizing resources.
Details about how the merger will be executed, including the name of the new entity and its leadership, will be shared later. The company aims to become a leading force in the insurance and financial sectors, focusing on efficiency and enhanced customer value.