Life, but not as we know it
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Life, but not as we know it

Meet some of the world's biggest investors. The 10 largest Japanese life insurance companies control assets of more than $1 trillion. But with a protected market and no shareholders to answer to, they have always done things a little differently to the rest of us. Now as insolvency fears and foreign competition grow, that is starting to change. Jack Lowenstein reports.

GE's unusual route to Japan

The lure of a listing

As mutual companies, with no shareholders and no stock analysts following their every move, Japan's big life insurers have long been a largely ignored part of the Japanese financial system.

However since the failure of Nissan Life in April 1997, and the near failure of Toho Life earlier this year, counterparties in wholesale markets have suddenly had to focus on life companies' creditworthiness.

At the same time foreign insurers scent opportunities in the consumer crisis engendered by Nissan and Toho. Better still, many hope they may be able to avoid the hard years it took existing foreign entrants to get a toehold in Japan by repeating GE Capital's spectacular "rescue" of Toho, which made it a major player in the industry virtually overnight.

Adding to the focus on the sector is the arrival in Japan of the demutualization wave that has swept the UK, Australia and South Africa and is now lapping at the shores of America. As a result, virtually every life company and major investment bank in Tokyo is forming teams to look at demutualization, a process that could swell the Nikkei by at least 10% over the next five years.

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