Amid diminishing returns in its home market,
Dai-ichi Life Insurance is planning to open a venture in Cambodia next year, as well as expand its presence in the US, according to the firm’s president.
Insurance companies in Japan have taken a hit due to an ultra-low interest environment, which aims to spur inflation. This brings down yields on Japanese government bonds (JGBs), which are traditionally a huge source of insurers’ investment income.
While many Japanese insurers have cut down or altogether stopped buying JGBs, Dai-ichi, the second-largest privately-owned insurer in the market, is turning its focus abroad to seek profits.
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The firm currently has ¥50 trillion (US$449 billion) in assets and acquired a 40% stake in Indonesian insurer PT Panin Life in 2013 for US$248 million. In 2015, it bought Protective Life Corp. in the US for US$5.6 billion.
In the Mekong region of Southeast Asia, Dai-ichi has full-fledged operations in Thailand and Vietnam, while representative offices were opened in Cambodia in July 2016 and Myanmar last month.
“We see the Mekong region as the next emerging market, where we can utilize know-how acquired in Asia,” Seiji Inagaki, Dai-ichi’s president, told Reuters.
The company is looking to open a new life insurance business in Cambodia as either a sole or a joint venture.
Meanwhile, Inagaki added that the company is currently searching for acquisition targets in the US, which is the largest insurance market in the world, through Protective Life. He also denied reports of planned expansions to the European market, saying the Mekong region and the US are the priority areas.
Inagaki, 53, has been with Dai-ichi since 1986 and oversaw the company’s initial public offering in 2010. He became president of the firm just this month.
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