Saturday, September 28, 2013
Japan Post To Expand Private Insurance Sales
TOKYO (Nikkei)--Japan Post will increase the number of post offices that sell insurance policies from American Family Life Assurance Co. of Columbus and other private-sector firms starting in October.
Aflac cancer insurance policies are now offered at 1,000 offices, and the expansion will bring this figure to 1,500, with plans to eventually sell them at all 20,000 or so direct-run locations. The outposts selling variable annuity insurance will be doubled to some 1,000, and the availability of life policies for business owners and car insurance will be expanded as well.
Medical insurance from Sumitomo Life Insurance Co. is currently offered at 1,000 locations, but the insurance firm is seeking to broaden this arrangement, with the details currently being negotiated.
Insurance is sold both over the counter at Japan Post's offices and through marketing personnel who make sales visits. Japan Post acknowledged last fall that it had failed to make insurance payments on past claims, raising alarms at the Financial Services Agency. In light of this, the latest expansion will center on major locations that are accustomed to insurance sales.
Boosting earnings remains the biggest challenge for Japan Post as it looks to go public in spring 2015. Japan Post Insurance Co. has lost more than 10 million policies in force since its privatization in 2007, sending its earnings tumbling.
At preliminary talks ahead of Japan's official participation in the Trans-Pacific Partnership negotiations, the U.S. objected to Japan Post branching out into other businesses, essentially freezing new product development. With Japan Post Insurance unable to expand operations for the time being, the group has switched to increasing fee income from private insurance sales.
(The Nikkei, Sept. 28 morning edition)