Asahi Life substantially reduces real estate holdings

Asahi Mutual Life Insurance Co, JapanÂ's fifth-largest life insurer by assets, said on Thursday it had slashed its domestic shareholdings by 800 billion yen ($6.03 billion) to around one trillion yen as of March 31.

The troubled insurer, which had vowed to cut risk assets as part of a two-year restructuring plan, said it had reduced its real estate holdings by 160 billion yen from 800 billion yen.

Latent losses on securities have been cut to around 60 billion yen after the firm wrote off 400 billion yen of such losses, it said.

Under its restructuring, Asahi plans to erase all unrealised losses (among the worst of JapanÂ's seven major life insurers) by the end of the 2003/04 business year.

Asahi has been under pressure to find its way back to health, particularly after a plan to merge with a unit of JapanÂ's largest non-life insurer, Tokio Marine & Fire Insurance Co 8751.T , fell through in January.

Analysts say domestic life insurers have faced deteriorating financial health because of 'negative spreads', which means they canÂ't deliver on guaranteed policy returns because of JapanÂ's zero interest rate policy.

Seven insurers have failed since 1997, falling victim chiefly to negative spreads and thin investment returns.

In the last business year ending on March 31, Asahi raised its capital base to 250 billion yen, helped by an injection of 150 billion yen from its main banks.

(source: Asahi)

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