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Sompo Japan, NipponKoa to merge: Nikkei
TOKYO (Reuters) - Japan's No. 3 non-life insurer Sompo Japan Insurance (8755.T) and No. 5 NipponKoa Insurance (8754.T) plan to merge, the Nikkei business daily reported on Thursday, in the latest move to consolidate amid a slump in demand.
Japan's non-life insurance industry is under pressure from slumping demand for car and housing insurance coverage, prompting rivals to join hands to cut costs.
The report comes less than two months after No. 2 Mitsui Sumitomo Insurance (8725.T) and two other rivals said they would merge to create Japan's top non-life insurer by revenue, topping Tokio Marine (8766.T).
In separate statements, both Sompo Japan and NipponKoa said nothing has been determined and declined to comment further.
The Nikkei said the two planned to merge by the spring of 2010.
The deal to create Japan's third-largest casualty insurer, with annual premium income of about $24.5 billion, is expected to be announced by the end of this week, the Nikkei said without citing sources.
The new firm would rank behind the market-leading entity to be created from the merger of Mitsui Sumitomo Insurance, Aioi Insurance Co (8761.T) and Nissay Dowa General Insurance Co (8759.T) and the current industry leader Tokio Marine.
A U.S. investment fund Southeastern Asset Management is a major shareholder in both Sompo Japan and NipponKoa.
(Reporting by Taiga Uranaka; Editing by Hugh Lawson)
