Collusion - Japanese Insurers

Japan's major property insurers are suspected of having colluded over insurance premiums for corporate customers such as oil refiners, steel companies and public transportation operators, sources close to the matter said Wednesday.

The Financial Services Agency is expected to order Japan's four major insurers, including Tokio Marine & Nichido Fire Insurance, to submit records of contracts for which they allegedly arranged premium levels to avoid competition, according to the sources.

The agency suspects that alleged cartel activities took place when the insurers jointly underwrote coverage for large infrastructure companies such as ENEOS Holdings, East Japan Railway and Narita International Airport, the sources said.

The other three insurers are Sompo Japan Insurance, Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance. The allegation comes on top of policy price-fixing involving joint coverage for railway company Tokyu by the same four insurers.

In June, the insurers admitted collusion for Tokyu's contract and began investigating whether there were other anti-competitive practices in selling other policies.

Dozens of suspected price-fixing cases at the insurers surfaced after employees were asked to report suspected antitrust business activities within their companies following the Tokyu incident.

Ahead of any potential investigations or penalties from the Japan Fair Trade Commission, insurance companies have conducted independent probes into suspicious deals, aiming to submit any evidence of cartel activities to authorities for leniency. There are suspicious contracts with companies in a wide variety of industries in addition to railway firms, oil refiners and steel companies.

Insurers typically provide coverage jointly for large companies to protect themselves against potentially large compensation demands.