Nipponkoa Insurance Co., the nation's fourth-largest casualty insurer, has raised its profit target and vowed to cut costs and increase sales in response to pressure from its biggest shareholder, Southeastern Asset Management Inc.
The company will target annual net income of ¥25 billion by March 2011, compared with its current goal of ¥9 billion, according to documents obtained Thursday.
The plan is designed to appease Memphis, Tenn.-based Southeastern, which in June opposed the re-election of Chief Executive Officer Makoto Hyohdo. The U.S. firm, with a stake of about 20 percent, said the Tokyo-based company provides the best opportunity in Japan's nonlife insurance industry for higher returns — if management improves.
"We have come up with this plan, keeping in mind our shareholder demands," Hiroki Yamanaka, a spokesman for Nipponkoa, said at a press conference in Tokyo. "We are hoping to shape this plan as we consult our shareholders to better meet their demands."
Nipponkoa plans to release full details of the plan in May, Yamanaka said.
The document said Nipponkoa will increase earnings by boosting its sales network, cutting costs and reducing cross-shareholdings in other companies.
Officials at Southeastern Asset could not be reached for comment.