| September 20, 2001 |
| Mitsui Sumitomo
Insurance Group and Citigroup agree to establish Life Insurance Joint Venture |
| The Sumitomo Marine & Fire Insurance Co., Ltd. Mitsui Marine & Fire Insurance Co.,Ltd. CitiInsurance International Holdings Inc. |
| The Sumitomo Marine & Fire Insurance Co., Ltd. (president: Hiroyuki Uemura), Mitsui Marine & Fire Insurance (president: Takeo Inokuchi) (to merge on October 1, 2001 into Mitsui Sumitomo Insurance Co., Ltd.), and Citigroup's international insurance unit, CitiInsurance International Holdings Inc., (CitiInsurance) (president: Robert J. Price) agreed to jointly establish a life insurance company in Japan and aim to launch sales of variable annuities next April. |
| 1. | Business Development | ||
| Mitsui/Sumitomo Marine and CitiInsurance plan to form a joint venture
life insurance company, pending regulatory approval, to provide variable
annuities. At the start, the joint venture will market its products
through leading financial institutions, including securities firms.
The product details are still being under development, but they are building an attractive product, which fully capitalizes on the features of annuity insurance - "mutual funds embodying the appeal of life insurance protection." The company's product explanations and customer service will be in full compliance with local laws. |
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| 2. | Equity Stakes | ||
| This joint venture will be 51% owned by Mitsui Sumitomo Insurance
Group and 49% owned by CitiInsurance. The company intends to operate
the business in the spirit of equal ownership.
Mitsui Sumitomo Insurance Group plans to invite other member companies of the Mitsui Sumitomo Financial Group to participate in their 51% share.
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| 3. | Schedule | ||
| The joint venture plans to start selling variable annuity products in April 2002. Both companies will begin preparations to establish the company and develop the products, services and systems towards this sales launch target. | |||
| 4. | Background / Rationale for this Agreement | ||
| Diversified financial products are emerging as a result of Japan's
"Big Bang" with the backdrop of the prolonged low interest
rate environment, introduction of defined contribution pension products
and deposit insurance. Consumers are expected to shift their money
from savings accounts to stocks and mutual funds. As part of this
trend, life insurance companies' annuity products are gaining attention
from consumers as their choices expand and their awareness is heightened.
This agreement for the joint venture was reached because both groups saw the common need to develop variable annuities for Japan. The development of these products will draw upon the extensive local market knowledge of Mitsui Sumitomo Insurance as well as the product experience and expertise of Travelers Insurance, the U.S. life and annuity insurance business of Citigroup. With the strong brand image of both companies and capitalizing on our respective strengths, we expect to develop and sell appealing products that attract personal financial assets. |
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