Mid-tier insurer Tokyo Mutual Life Insurance Co. will receive 30 billion yen worth of capital assistance from Daiwa Bank and other corporations at the end of March, Tokyo Mutual officials said Friday.
The funds will raise the life insurer's solvency margin from the current 370 percent to more than 500 percent, officials claim.
Tokyo Mutual's solvency margin -- a gauge of an insurer's ability to pay the claims of policyholders -- has been closely watched by policyholders alarmed by a recent string of failures in the insurance industry.
While the current percentage is still above the 200 percent level indicating minimum fiscal soundness, it is the lowest of the nation's 12 major and mid-tier insurers.
An exodus of policyholders caused Tokyo Mutual's premium revenue to drop 7.6 percent to 6.19 trillion yen in the six months through September, with its solvency margin falling from 446 percent at the end of March to 370 percent at the end of September.
Following the failures of Chiyoda Mutual Life Insurance Co. and Kyoei Life Insurance Co. in October, there were 1.8 times more canceled contracts than in the same month the previous year.
A plan to change Tokyo Mutual into a joint-stock company, announced in November, is still in the works.
The need to invest in information systems to raise Tokyo Mutual's competitiveness means that the firm must adopt a management structure and level of transparency that will make it easier to form alliances with foreign firms, officials said.