Autobacs to Enter Nonlife Insurance Business With AIG

Tokyo, Aug. 6 (Jiji Press)--Japanese auto parts retailer Autobacs Seven Co. said Monday it will set up a joint venture with American International Group Inc. to prepare for the launch of a nonlife insurance business.

Autobacs, which as an agent for nonlife insurers already sells compulsory automobile liability insurance, plans to develop original auto insurance products and tap demand from its customers, the company said.

The joint venture will have capital of 490 million yen, 65 pct of which will be put up by Autobacs and the rest by AIG, a major U.S. insurer.

It is not known yet when the new company will start operations and obtain an insurance business license.

Autobacs annually undertakes about 280,000 automobile inspections at its 500 outlets across Japan, and sells compulsory auto liability insurance to 95 pct of the customers. It sees such customers as a prospective market for the joint venture.

AIG will provide the joint venture with automobile insurance business expertise, while expecting reinsurance premium revenue from the new company.END

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