3 Japan insurers in merger talks

TOKYO: Japan's No. 2 non-life insurer, Mitsui Sumitomo Insurance Group Holdings Inc., is in merger talks with two smaller rivals to create the country's largest non-life insurer, reports said Monday.

The merger talks come as sales of auto insurance, the industry's core product, drop due to sluggish vehicle sales amid the global financial downturn, said the Nikkei, Japan's top business daily, and the Yomiuri, the nation's top-selling newspaper, citing unnamed industry sources.

The merger between Mitsui Sumitomo Insurance and the two smaller firms, Aioi Insurance Co. and Nissay Dowa General Insurance Co., could take place as early as autumn next year, the Yomiuri said.

The combined annual insurance revenue would amount to 2.7 trillion yen ($30 billion), topping 2.2 trillion yen of Japan's No. 1 non-life insurer, Tokio Marine Holdings Inc., the papers said.

Mitsui Sumitomo Insurance declined to confirm the reports Monday, saying in a statement that nothing has been decided at this time.