Sompo Japan, Nipponkoa Insurance To Merge In Spring '10

Sompo Japan Insurance Inc. and Nipponkoa Insurance Co will merge by spring 2010 under a holding company set up by Sompo Japan. Sompo Japan is currently the third largest casualty insurance company while Nipponkoa Insurance Co is the fifth largest insurance company. The new company will become the third largest casualty insurance group in Japan, following the Mistui Sumitomo, Aioi Insurance and Nissay Dowa Insurance Merger and Tokio Marine Holdings Inc. In 2000, deregulation of insurance premiums triggered a large-scale reorganization and resulted in a consolidation to six major players. By April of 2010, analysts expect there to be only three major players: Mitsui Sumitomo, Aioi and Nissay Dowa’s new company, and Sompo Japan and Nipponkoa’s new company. A shrinking domestic casualty insurance market may have motivated the mergers. Slow new-car sales and an aging population have deterred purchases of auto insurance policies.