Aioi Acquires Short-Term Household Insurer in Japan

Aioi Insurance Co. Ltd. [85028] has acquired a 35% stake in Zenkankyo, a mini-insurer specializing in short-term household insurance, in a bid to enhance business development for products and services in Japan.Aioi and Zenkankyo will operate mutually as two entities with the promotion of their insurance business in the house rental sector, according to the insurers' joint statement.With capital of 1 billion yen (US$11 million), Zenkankyo reported net income of 181 million yen and premium income of 6.4 billion yen for the fiscal year ended March 31, 2009. The insurer is 65% owned by Zenkoku Chintai Kanri Business Kyokai, a house rental business association with 2 million houses in management across Japan.In the first six months of the current year ended Sept. 30, Aioi posted net income of 17.2 billion yen, up from previous year's 5.8 billion yen.Japan's business environment remains stagnant despite recent recovery indications such as improvements in excess inventory levels and large-scale stimulus measures. The company "has continued to develop our business aiming at being an insurance group" for steady growth, said Aioi in its interim financial report.For nonlife business in Japan, Aioi said the company has focused on sales to existing customers by working with agencies and broker dealers. For automobile insurance, the insurer plans to expand discounts and improve system simplification for age qualification to make insurance products more accessible to customers.Aioi Insurance Co. Ltd. [85028] currently has a Best's Financial Strength Rating of A (Excellent).(By Iris Lai, Hong Kong bureau manager: [email protected])