Major U.S. nonlife insurer Liberty Mutual Insurance Co. plans to withdraw from the Japanese market at the end of March because the country's business prospects are poor, industry sources said Tuesday.
The firm, which has been restructuring its operations following the terrorist attacks in the United States last year, has failed to win new contracts in Japan amid the recession.
"Perhaps this is the first case of a foreign insurer being forced to close its Japanese offices as a result of the terrorist attacks," an official at a major Japanese insurer said.
According to industry sources, there will be no change to Liberty Mutual insurance contracts following its withdrawal.
Liberty Mutual is expected to consider transferring all of its operations in Japan to another insurer in the future.
The company, which ranks eighth among U.S. nonlife insurers, entered the Japanese market in 1996, marketing fire insurance and other policies. It has eight offices in Japan.
In 2000, revenues from insurance premiums in Japan came to 2.9 billion yen, and the Japanese arm suffered a loss of roughly 300 million yen.
Liberty Mutual's insurance premium revenues worldwide in 2000 came to roughly $8.6 billion (about 1.1438 trillion yen).
Partial deregulation prompted many foreign insurers to enter the Japanese market in the 1980s, but some have withdrawn after failing to be profitable.