Tokio Marine & Nichido Fire Insurance Co. will introduce new trade insurance to support Japanese companies’ advancement to Viet Nam. — Photo nikkei.com
Three major Japanese nonlife insurance companies will introduce new trade insurance to support Japanese companies’ advancement to Viet Nam, with help from 100 percent state-owned Nippon Export and Investment Insurance (NEXI).
With an eye on the Trans-Pacific Partnership signed by 11 countries including Japan and Australia coming into effect, the move aims to strengthen the support system in cooperation of the Japanese private and public sectors in Viet Nam, which is expected to become a new manufacturing base.
Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Nipponkoa Insurance Inc. and Mitsui Sumitomo Insurance Co. will be involved in the new trade insurance, which will cover unsettled payments for affiliated corporations established by Japanese companies in Viet Nam when they export products to other countries including Association of Southeast Asian Nations members, Central and South American countries and elsewhere, but not including Japan.
NEXI, cooperating with the three companies, will underwrite reinsurance. The trade insurance is to indemnify up to 90 percent of a loss.
The three companies are strong in marine insurance, which covers losses due to accidents while transferring products and other situations, as well as fire insurance. But they are not well experienced in judging the payment abilities of companies in emerging nations. So, they are to adopt NEXI’s know-how.
In many cases in Viet Nam, affiliated companies of Japanese companies do not have enough staff. They face obstacles such as difficulties in ascertaining the payment ability of their counterparts in export destinations.
It is expected that the risks will be decreased by utilizing trade insurance, making it easier to find more export destinations.
Similar frameworks have already been introduced in Singapore, Thailand and other countries. As attention has been paid to Viet Nam ahead of the TPP going into effect, it has been decided that such a system will also be introduced in the nation. — The Yomiuri Shimbun