The Sompo group will integrate its direct insurance service in the Thilawa Special Economic Zone, and its direct insurance service through a local insurance company outside the Special Economic Zone, into its joint venture in Myanmar called AYA SOMPO Insurance, Mr Kengo Sakurada, group CEO & president of Sompo Holdings has announced.
The announcement follows the grant of an insurance operating licence by the Myanmar authorities to AYA SOMPO Insurance, a joint venture formed between Sompo Japan Nipponkoa Insurance and AYA Myanmar General Insurance Company.
The integration of various Sompo operations in Myanmar, based on the progress of liberalisation by the local authorities, is to improve customer convenience and services.
Sompo Holdings in a statement said, “By investing not only capital but also our group’s advanced technologies and human resources in AYA SOMPO, we will strive to achieve sustainable growth in AYA SOMPO's business performance and improve its governance. In addition, we will contribute to the penetration of insurance and the development of the market in Myanmar.”
Sompo's activities in Myanmar
Sompo Japan Nipponkoa was the first foreign insurance company to obtain a business licence for the Thilawa Special Economic Zone in 2015, and has been providing insurance services in the zone. In December 2018, together with Myanma Insurance, and Myanma Agricultural Development Bank, which provides loans to farmers, Sompo Japan Nipponkoa launched a pilot “Weather Index Insurance" project for farmers, as agriculture is one of the major industries in Myanmar.
Sompo Japan Nipponkoa signed a memorandum of understanding on business cooperation with AYA Myanmar Insurance, which is predecessor company of AMGI, in 2016. In response to the commencement of the non-life insurance market liberalisation process by the Ministry of Planning and Finance in January 2019, Sompo Japan Nipponkoa and AMGI applied for approval of a joint venture on the following essential terms:
subscription of newly issued shares of AMGI for 15% by Sompo Japan Nipponkoa at the first stage and contribution by active management participation including the selection and dispatch of multiple directors;
increasing shareholding of Sompo Japan Nipponkoa to 35% within two years of the first stage;
undertaking bancassurance business through the network of AYA Bank, the second-largest commercial bank in Myanmar, as a main business of the joint venture.
Approval to form the joint venture was granted by the Ministry on 4 October 2019.
As the core company of the SOMPO Holdings, Sompo Japan Nipponkoa, originally established in Japan in 1888 as a general insurance company, has established a network spanning 218 cities in 30 countries including Europe, the Middle East, North America, Central and South America, Asia, Oceania and Africa.