Mitsui Sumitomo Insurance to invest further in corporate debt

Riskier investment approach taken in order to counter stagnant domestic bond market

Mitsui Sumitomo Insurance to invest further in corporate debt

Insurance News

By Gabriel Olano

A senior executive of Mitsui Sumitomo Insurance has revealed the firm plans to ramp up investment in “risky” assets by ¥30 billion (US$268.3 million) in the second half of this financial year.

The Japan-based insurer is planning to invest up to¥100 billion for the year, up from the initially planned ¥60-70 billion yen, according to Tomonori Mano, manager of Mitsui Sumitomo’s investment planning department.

Investments considered “risky” include foreign stocks and debt, as well as private equity.

While investors were initially concerned with geopolitical risks such as the tension in the Korean Peninsula, “the relatively stable market allowed ourselves to have enough funds, so we moved forward the investment schedule,” Mano told Reuters.

Mitsui Sumitomo plans to hold its domestic bond assets steady this year, due to continued low yields of Japanese government bond yields due to the Bank of Japan’s negative interest rate policy.

It also plans to reduce its holdings of domestic stocks as part of the final year of its four-year plan to lower the exposure by around ¥500 billion.

Many Japanese insurers have begun disposing their cross-holdings of shares, as they consider these risky to their financial health.

Related stories:
Mitsui Sumitomo to purchase Singapore-based insurer from Fairfax
Japan’s motor insurance premiums shift into reverse gear
Demand for dementia liability coverage growing in Japan

Keep up with the latest news and events

Join our mailing list, it’s free!