Axa Japan Acquires SBI’s Entire Stake in Internet Joint Venture

Axa Japan Holdings Co. Ltd. [51939] and SBI Holdings Inc. said they will break up in their on-line life joint venture, SBI Axa Life Insurance Co. Ltd. [90818], in Japan.

SBI, a Japan-based financial services group, will sell its entire 55% stake in SBI Axa to Axa Japan, and the group will then withdraw from the on-line life joint venture. The move will not have any impact on SBI Axa's policyholders, said the two companies in separate statements.

The transaction will increase Axa Japan's stake in SBI Axa to 95%. The value of the deal was not disclosed. The remaining 5% share is held by Softbank Corp., a Japanese telecommunications and Internet services and content provider.

The acquisition will enable Axa Japan to "further reinforce our capabilities in a multidistribution platform," said a spokesperson for Axa Japan. The brand name of SBI Axa will be changed.

"We have decided to take full control of SBI Axa with the aim of further enhancing our life insurance business through the Internet, which we see as having high growth potential," said the spokesperson. With full control of SBI Axa, the French insurer said this would accelerate growth by utilizing the company's global direct business knowledge.

With 10,499 total in-force policies, SBI Axa posted premium income of 188 million yen (US$2.09 million) for the first half of the 2009 fiscal year. The on-line insurer offers medical and term life insurance products through Internet distribution in Japan.

In 2006, SBI and Axa Japan, a unit of French insurer Axa S.A. [85085], jointly established SBI Axa as a specialized Internet life insurer with the aim of offering low prices and high-quality life insurance products, said SBI. SBI Axa's total capital amounted 3.75 billion yen (US$41.8 million) in March 2009, according to SBI.

SBI said at that time that the group intends to offer a full line of products through the Internet life insurance venture.

But the two joint venture partners had different views of the company's strategy. Therefore, SBI said the group agreed to sell its entire stake in SBI Axa to achieve a more stable operational development under a consolidated and clear business strategy for the insurer's long-term growth.

SBI has another nonlife online insurance venture, SBI Insurance Co. Ltd. [90530], established in 2006 with Aioi Insurance Co. Ltd. [85028]. SBI and Aioi hold 61.6% and 33.4% stakes in SBI Insurance, respectively.

Axa Japan has life and nonlife subsidiaries including Axa Life Insurance Co. Ltd. [86891] and Axa Direct. The French insurance group also owns investment management units in Japan including Axa Rosenberg and AllianceBernstein Japan Ltd.

(By Iris Lai, Hong Kong bureau manager: [email protected])