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Major Japanese non-life insurers Mitsui Sumitomo Insurance Group Holdings, Aioi Insurance and Nissay Dowa General Insurance said on Friday they aim to merge operations in April 2010.
Japan's non-life insurance industry is under pressure from slumping demand for car and housing insurance coverage, as well as the financial market turmoil.
The three firms aim to achieve growth within and outside of Japan by teaming up with Toyota Motor, which holds a 33 percent stake in Aioi, and Nippon Life Insurance, which owns 35 percent of Nissay, the insurers said in a statement.
Aioi and Nissay will swap shares with Mitsui Sumitomo, the holding company, under which Aioi and Nissay will merge, the companies said.
The new insurance group will be given a "neutral" name instead of inheriting one from the three insurers, they said.
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The merger of Mitsui Sumitomo, Japan's second-largest non-life insurer, with No.4 Aioi and No.6 Nissay Dowa would create the country's top non-life insurer by revenue, topping Tokio Marine Holdings.
The three insurance firms together had net premium revenue of about 2.7 trillion yen ($30.4 billion) in the year to March 2008, surpassing Tokio Marine's 2.2 trillion yen.
Mitsui Sumitomo and Nissei Dowa forecast their net profits will fall by nearly half their year-ago levels in the current financial year.
Nissay Dowa aims to return to profit after hefty investment losses last year.
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