TOKYO Feb 7 Dai-ichi Life Insurance Co
, one of Japan's top four insurance companies, said it
plans to invest in Southeast Asian infrastructure finance in the
next three years, taking on a new investment area as it looks to
Japanese life insurers are hungry for higher-yield
alternatives to government bonds, but have been cautious about
investing in riskier but potentially more profitable options,
such as offshore project finance, due to a lack of credit risk
"In ASEAN countries, demand for infrastructure finance is
strong," Hideyuki Ohashi, deputy general manager of Investment
Planning at Dai-ichi Life told Reuters in an interview.
"As developed countries' interest rates will remain at low
levels for a long time, we need to take new actions to enhance
our absolute returns," he said.
Dai-ichi, the only listed company among Japan's four main
life insurers, said it hopes to tap Southeast Asia's growth
potential by providing finance to infrastructure projects, such
as power generation and transportation.
Overseas project finance can offer a yield 2-3 percentage
points above domestic bonds.
Japan's top banks including Mitsubishi UFJ Financial Group
are the biggest arrangers for global project finance
after traditionally strong European players retreated in the
wake of the region's debt problems.
Arranger banks say the participation of long term-oriented
investors like life insurers and pension funds would increase
the steady flow of money in the field.
The move is part of Dai-ichi's plan to allocate at least
20-30 billion yen ($210-320 million) over next three years to
Asia infrastructure, green projects like renewable energy, and
growth businesses like health care.
Dai-ichi aims to invest in third-party infrastructure funds,
given its lack of experience and the opportunity to diversify
risk. It also wants to take part in projects whose debts are
guaranteed by export credit agencies, such as Nippon Export and
Investment Insurance (NEXI) and Japan Bank for International
Cooperation (JBIC), Ohashi said.
Japanese life insurance companies have mostly shunned
overseas project finance, with the last investment in 2004 when
Nippon Life Insurance and Sumitomo Life Insurance
took part in a $209 million project financing guaranteed by JBIC
for a Brazilian subway operator, Thomson Reuters LPC data shows.
($1 = 93.3950 Japanese yen)
(Additional reporting by Wakako Sato; Editing by Richard