Yamato Becomes Japan's First Insurer To File For Bankruptcy Hit By Global Financial Turmoil

Fri, 10 Oct 2008 06:01:26 +0000
AHN Staff

Tokyo, Japan (AHN) - The global economic crisis has started to hit Japan's financial sector after a mid-sized insurance company filed for bankruptcy becoming the first company to collapse in Asia's largest economy.

The 98-year-old business, Yamato Life Insurance Co., filed for bankruptcy protection from creditors on Friday, for the first time in seven years in the sector.

The firm's debts exceed assets by 11.5 billion yen ($116 million), which is a result of the decreased value of its securities holdings, the company's president said.

"We are deeply sorry and offer apologies from the bottom of our hearts," Yamato Life Insurance Co President Takeo Nakazono was quoted saying by Japan Today, local English newspaper, as he bowed deeply on nationally televised news.

Yamato Life Insurance Co. President Takeo Nakazono said on Friday that the company's stocks had lost value over the last 12 months since the subprime contagion began, sending the shares down $111 million in the red.

Yamato employees around 1,000 people and had almost 170,000 individual insurance contracts by the end of March this year.

It had assets worth 283.1 billion yen ($2.86 billion) and around 1.075 trillion yen ($10 billion) in individual policy accounts at the end of the fiscal year through March 2008, according to local reports.

By the end of September, the company had moved its assets to alternative investments, accounting almost 30 percent of the firm's total portfolio.

President Nakazono told reporters on Friday that the Tokyo-based company will look for sponsors and seek court authorization for its rehabilitation.

Reports showed that the number of corporate bankruptcies in the country had surged by 34 percent in September, which is considered to have increased at the fastest pace in eight years.

According to local reports, Yamato's bankruptcy filing was positioned as the fifth biggest corporate collapse in the country this year.

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