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Under the umbrella of the Japan Post GroupKanpo Life Insurance Co., Ltd. has decided to buy its own shares and reduce the investment ratio of its parent company, Japan Post, to 50% or less. Several officials said yesterday.
Eliminate the “additional restrictions” of the Postal Service Privatization Law, which is an obstacle to management. The degree of freedom in new business, such as supplying new products, will increase, and attractive products will be introduced to the market to enhance competitiveness.
According to people familiar with the matter, Kanpo Life has started making adjustments to resolve the purchase of its own shares at the board meeting which was held in a month at the earliest. The scale is expected to be about 300 billion yen. Japan Post, the holding company, responds to the purchase of its own shares and sells its stake to some extent. As a result, the postal investment rate will be reduced from the current 64% to less than 50%.
Japan Post Group Logo
Photographer: Kiyoshi Ota / Bloomberg
The solvency margin ratio, which indicates the strength of the management, will decline due to the purchase of own shares, but in January next year, we will publicly apply for subordinated bonds capitalized on the scale of 100 billion yen.The plan is to ensure robustness at the same time.
From the perspective of avoiding pressure on the private sector, the two financial companies Yucho Bank and Kanpo Life under the Japan Post umbrella are subject to “additional restrictions” that restrict their operations more strictly than general banks and insurance companies. under the Postal Service Privatization Act. Kanpo Life has a maximum subscription limit of 20 million yen per insured person and a national approval is required to sell new products and services. It took time to get approval, which put a burden on management.
Due to the decline in the Japan Post investment index, additional restrictions were removed and new product launches moved from the approval system to the advance notification system. It will be possible to flexibly introduce new products to the market. Japan Post is in the upcoming fiscal 2021 medium-term management plan that was announced on November 13, its stake in the two finance companies showed a target of falling to 50% or less in perspective within 5 years.
Kanpo Life’s Public Relations Department has told Bloomberg that it has not decided anything, so it will not comment. No response has been received from the Japan Post Group.
Last summer, the Japan Post Group reported that there were many fraudulent sales of Kanpo Life insurance products handled at the post office.Discovered. In a report published in March, a special investigative committee of outside attorneys said: “We will develop products that meet market needs and shift to a business model that can respond to changing times and environment.” Proposed.
