TOKYO -- Yasuda Fire & Marine Co. will take a majority stake in INA Life Insurance Co., a Japanese life insurer now 90 percent owned by Cigna Corp. of the United States, Yasuda officials said yesterday.
Yasuda, which owns 10 percent of INA, will increase its share-holding to more than 50 percent during the next one to two years, said Koichi Ariyoshi, the company's president.
Ariyoshi said the company would buy INA's shares from Philadelphia-based Cigna.
He declined to say how much the acquisition would cost the company, Japan's second largest nonlife insurer.
Analysts said Yasuda's stock purchase was aimed at paving the way for the company to start selling such products as cancer insurance, which Japanese life insurance firms can sell but nonlife insurers such as Yasuda can't.
"Yasuda had already announced that it was not going to set up its own life insurance subsidiary, so it was assumed that this meant it would sell products of INA," said Brian Waterhouse, an analyst at James Capel Pacific Ltd.
Other major Japanese nonlife insurance firms have said they will establish life insurance subsidiaries Oct. 1.
However, analysts say that the Ministry of Finance probably will prevent these subsidiaries from selling cancer insurance for several years.
In bilateral insurance talks, the U.S. government has pressed the Japanese government to keep Japanese life and nonlife insurance subsidiaries from selling so-called "third-sector" insurance, such as cancer and accident insurance, in which U.S. insurers have significant shares in Japan.
Negotiations on the issue between the Finance Ministry and the U.S. trade representative's office broke up early this month. They are set to resume in September.
Yasuda's Ariyoshi said the share acquisition was not intended to enable Yasuda to enter the third sector without setting up subsidiaries.
"We have had business ties with Cigna for 15 years and we concluded it's better to strengthen the existing ties to boost sales than to set up a new subsidiary," Ariyoshi said. "This is one example of U.S.-Japan cooperation in the private sector."
INA sells a variety of life insurance products, including sickness policies, which Japanese life insurance companies are not allowed to sell.
Pub Date: 8/27/96