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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (6026)	4/27/2002 3:49:40 PM
From: Sweet Ol	Respond to of 33421

Hawk, thanks for the great article. I have bookmarked it for future reference. Best to all, JRH

To: Hawkmoon who wrote (6026)	4/29/2002 1:43:55 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

4 of the largest Japanese insurance companies are going to draw on their reserve funds to cover unrealized security losses in their portfolio's from the financial year that ended in March. So they are continuing to make progress cleaning up the balance sheet and We are seeing some "Mark to Market" occurring. Sumitomo Life Insurance Co., Yasuda Mutual Life Insurance Co., Asahi Mutual Life Insurance Co. and Mitsui Mutual Life Insurance Co. are expected to draw on a combined Y300-400 billion in reserve funds to cover unrealized securities losses for the year ended this March, sources familiar with the matter said, the Nihon Keizai Shimbun reports in its Sunday edition. Though life insurers are required by law to set aside two kinds of reserves, one in case of major losses caused by a sharp decline in asset values and the other for contingencies necessitating the payment of huge sums of insurance money, most insurers have seldom resorted to drawing on such money in the past. The Nikkei Stock Average index, however, dived 15% on the year during fiscal 2001, causing investment returns earned by life insurers to fall far below yields guaranteed to policyholders. Sumitomo, Yasuda and Mitsui expect to post pretax and net profits for fiscal 2001 by using mostly reserves set aside for losses caused by a decline in asset values. Asahi, which will rely on both types of reserves, will likely post a pretax loss and net profit. The use of such funds, however, is expected to negatively affect the life insurers' solvency margins, which are a gauge of their ability to pay out insurance claims. In March, Sumitomo, Asahi and Mitsui raised funds to boost their capital.