Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance plan to merge in April 2027, their parent, MS&AD Insurance Group Holdings, said Friday.
The merger will create the biggest nonlife insurer in Japan, overtaking current industry leader Tokio Marine & Nichido Fire Insurance.
The move is aimed at making operations more efficient and boosting profitability as Japanese nonlife insurers face the challenges of a shrinking domestic market due to societal aging and increasing benefit payments because of a series of large-scale natural disasters.
The merger between Mitsui Sumitomo Insurance and Aioi Nissay Dowa will consolidate the Japanese nonlife insurance industry into three major firms, also including Tokio Marine and Sompo Japan Insurance, compared with over 10 in the late 1990s.
Mitsui Sumitomo Insurance and Aioi Nissay Dowa had ¥2.99 trillion ($20 billion) in premium revenue together in the year ended in March last year, exceeding Tokio Marine at ¥2.42 trillion and Sompo Japan at ¥2.18 trillion.
Mitsui Sumitomo Insurance, Aioi Insurance and Nissay Dowa General Insurance combined operations under the holding company, MS&AD, in April 2010. Aioi and Nissay Dowa merged that October to become Aioi Nissay Dowa.
Mitsui Sumitomo Insurance's forte is with corporate clients while Aioi Nissay Dowa focuses more on individual clients and auto insurance.
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