Yasuda to Buy Majority Stake In Cigna's INA Life Insurance
May 08, 2011
TOKYO -- Yasuda Fire & Marine Insurance Co. said it agreed to buy a majority stake in INA Life Insurance Co., a Japanese unit of Cigna Insurance Co. of the U.S., in a move that takes advantage of deregulation in Japan's insurance industry. Yasuda already owns 10% of the Cigna unit, which it bought in 1993. Neither Yasuda nor Cigna would say what exact percentage of INA Life Yasuda intends to buy; nor did they reveal a price or date for the sale. Cigna said it intends to retain part of the company for itself. INA Life, which will change its name in January to Yasuda Kasai INA Life Insurance Co., sells annual insurance premiums totaling about $650 million, mostly to individuals and small and medium-sized companies throughout Japan. By putting its local life-insurance unit under Japanese control, Cigna will have ``the ability to compete more effectively in a market that will see greatly increased competition,'' said Tinisha Money, senior vice president of Cigna International. ``We have obviously decided that in the long term we are much better off with a lesser interest in'' INA Life. The sale follows the Finance Ministry's decision earlier this month to allow life insurers and so-called nonlife insurers, which sell casualty, property and other insurance, to enter each others' lines of business. For more than a decade, INA Life has depended on Yasuda salespeople to sell its policies, and currently 5,000 Yasuda employees sell INA products. Yasuda said INA will now benefit even more from its sales force. While Cigna's stake in the unit will fall, Mr. Money said, its revenues from that stake might grow. For Yasuda, the Cigna unit will provide quick entry into the life-insurance market, while many of its competitors start their life-insurance units from scratch. Cigna and Yasuda have shared ties since 1972, when Cigna helped Choate get a U.S. insurance license. In 1982, Yasuda advised Cigna on how to launch INA Life in Japan.
