The three-way integration of Mitsui Sumitomo, Aioi and Nissay Dowa (2009)

Integration as a counterweight, and the question left open

What this decision shows is a Mitsui Sumitomo that, in an industry consolidating into a few large groups, risked being outranked on its own scale and so drew in two insurers from different corporate families to build a counterweight. With Tokio Marine and the Sompo Japan camp integrating in parallel, the thoroughness of preparing the holding-company structure first and then arranging to receive its partners into it says a great deal about the character of this combination. Gathering insurers with different backers into one group, it reached a scale among the largest in Japan.

The integration, though, stopped at a holding-company format that preserved brands and distribution networks, and the core companies — Mitsui Sumitomo and Aioi Nissay Dowa — went on coexisting as separate firms for years afterward. The flip side of the concern that unifying agency networks from different lineages in one move would throw the field into confusion was that duplication in head-office functions and claims-service infrastructure was left in place. The three-way integration established the group’s framework while carrying the question of how to bind the core insurers together into later years. It can be read as the end point of one wave of non-life consolidation and, at the same time, the starting point of the next.