TOKYO -- Japan Post Insurance and Dai-ichi Life Insurance will join hands to provide financing and insurance overseas, with Japan Post Insurance aiming to shore up flagging returns while Dai-ichi seeks to tap its partner's sales expertise.
The comprehensive alliance, to kick off next fiscal year, is expected to be approved by the insurers' boards Tuesday.
The two companies will consider offering project financing overseas. Among the possibilities under discussion is having Japan Post Insurance furnish funds for joint investments to such companies as Asset Management One, which is run by Dai-ichi Life and Mizuho Financial Group. Japan Post Insurance may also buy into Trust & Custody Services Bank, which is also connected to Dai-ichi Life and Mizuho Financial Group.
In the insurance business, Japan Post Insurance will team with a Vietnam-based unit of Dai-ichi Life that recently entered an alliance with state-run Vietnam Post, offering insurance at post offices in the country. Japan Post Insurance may invest in that subsidiary as well.
Domestically, Dai-ichi Life and Japan Post Insurance will discuss selling each other's offerings and using big data to research new products.
Although Japan Post Insurance had worked with Nippon Life Insurance on product development in 2008, talks between the two have effectively ended. Japan Post Insurance likely determined that working with Dai-ichi Life, which can raise money faster than a mutual company like Nippon Life, was necessary for speedy reform.
Because government and corporate bonds make up more than 70% of Japan Post Insurance's portfolio, returns have been hit hard by sinking government debt yields. The company will learn from Dai-ichi Life, a private-sector insurer that has more experience with risky investments.
Competition for market share has escalated in Japan. Nippon Life announced in September plans to acquire Mitsui Life Insurance. American Family Life Assurance, better known as Aflac, entered an expanded alliance with Japan Post in 2013, under which it sells cancer insurance at 20,000 post offices nationwide. Other insurers, facing a tough environment as Japan's population shrinks, will likely seek out partnerships in a variety of fields.