Japan’s three major non-life insurers have sold ¥1.64 trillion ($11 billion) in cross-held shares within nine months, effectively approaching their fiscal goal. The divestments aim to improve governance and mitigate close corporate ties, while proceeds will fund shareholder returns and future investments. The initiative has positively affected their net incomes.
Japan’s three largest non-life insurance companies have collectively divested approximately ¥1.64 trillion ($11 billion) of cross-held shares during the period from April to December of the previous year. This strategic move follows a governmental initiative aimed at diminishing such shareholdings. The amount sold accounted for nearly 90% of their targeted sales of ¥1.84 trillion for the fiscal year concluding in March 2025. Notably, Tokio Marine Holdings disposed of ¥781 billion in shares, MS&AD Insurance Group Holdings sold ¥536.8 billion, and Sompo Holdings reduced their holdings by ¥328.5 billion.
These insurers face increasing scrutiny regarding their governance practices, particularly after they incurred fines from regulators for prior coordinated adjustments of insurance fees. A principal objective of the share sales is to sever excessively intimate relationships with other entities. The insurers have committed to a plan to reduce these holdings over the forthcoming six to seven years.
Mitsushige Akino, President of Ichiyoshi Asset Management, remarked, “The sale of cross-shareholdings is progressing more quickly than planned, which is positive.” He emphasized that the critical factor now lies in whether insurers effectively reinvest their capital into profitable ventures.
The companies intend to use the proceeds from their share divestitures to reward shareholders, pursue mergers and acquisitions, and invest in workforce development. Notably, the revenue generated from these sales has contributed to an increase in net income for all three firms during the nine months leading to December.
In summary, Japan’s top three non-life insurers have proactively sold off a substantial portion of their cross-held shares, fulfilling nearly 90% of their planned sales amidst regulatory pressures. This divestment aims to enhance governance, reduce corporate entanglements, and will fund future shareholder returns and strategic investments. The financial results indicate a positive impact from these sales on their net income, highlighting the effectiveness of the initiative.
Original Source: www.japantimes.co.jp
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