The recent re-election of Japanese Prime Minister Junichiro Koizumi should be good both for the foreign life insurers and the private domestic life insurers doing business in Japan.[@@]
Jason Zucker, an analyst in the New York office of Fox-Pitt, Kelton writes about the implications of Japan's election results for all U.S. insurers with operations in Japan in a recent comment on Prudential Financial Inc., Newark, N.J.
Aflac Inc., Columbus, Ohio, is famous for establishing the Japanese cancer insurance market. Other companies with major operations in Japan include American International Group Inc., New York, and MetLife Inc., New York.
"The market is ignoring changes in Japan," Zucker writes. "We were surprised that stocks like Aflac and Prudential did not get a bounce with news that Koizumi had been re-elected. This is exciting stuff and we believe it will be later viewed as a major milestone for Japan."
Koizumi scheduled the fall elections mainly because of problems related to his efforts to privatize the mammoth Japanese postal service. One element of that project would include converting Kampo, Japan's huge postal life insurance system, into a private system.
Private Japanese life insurers have joined with insurers from the United States and elsewhere to complain about the special tax treatment and the many special regulatory provisions that give Kampo a huge edge over private competitors.
