Taiyo Life Insurance of Japan buys 35% stake in Myanmar's Capital Life Insurance
YANGON, NNA - Japan’s Taiyo Life Insurance Co. has bought a 35-percent stake in Capital Life Insurance Ltd. of Myanmar to establish a foothold in the largely underinsured country, which has been attracting foreign industry peers.
Taiyo Life acquired the shares from Capital Life on Thursday last week for 10.6 billion kyat ($7.04 million) to make it an overseas affiliated company, the Tokyo-based firm said in a statement. In Myanmar, a foreign investor is allowed to own up to 35 percent of a domestic firm.
The two companies will start up a joint venture to sell life insurance after the Myanmar government gives final approval for the project, the statement said.
Capital Life, established in 2012 as a group arm of local conglomerate Capital Diamond Star Group, has about 200 employees and seven branches in the country.
Its insurance premium income stood at 25.2 million kyat in the business year to March 2019. Its registered capital has increased to 16.6 billion kyat from 6 billion kyat after Taiyo’s capital injection, according to the statement.
Taiyo Life, which in 2012 became the first foreign life insurer to set up a representative office in Myanmar, has sought to contribute to the development of Myanmar’s insurance industry, the statement said.
It applied for the formation of a joint venture with Capital Life after Myanmar’s Planning and Finance Ministry decided in January this year to open the insurance market to foreign ownership. The ministry gave initial approval to the application in late July, the statement said.
Apart from Taiyo Life, two foreign life insurance companies – Japan’s Nippon Life Insurance Co. and Thailand’s Thai Life Insurance Public Co. – and three Japanese non-life insurers – Sompo Japan Nipponkoa Insurance Inc., Tokio Marine & Nichido Fire Insurance Co. and Mitsui Sumitomo Insurance Co. – are expected to launch joint ventures with local insurers in Myanmar. Japan’s Meiji Yasuda Life Insurance Co. has a 15-percent stake in Thai Life.
Additionally, five foreign companies – Japan’s Dai-ichi Life Insurance Co., AIA Group Ltd. of Hong Kong, Swiss-based Chubb Ltd., Canadian Manulife Financial Corp. and Prudential Financial Inc. of the United States -- have been permitted to set up wholly owned life insurance firms in Myanmar.