THE MEIJI MUTUAL LIFE INSURANCE COMPANY

1858–1990

The Meiji Mutual Life Insurance Company, Japan's oldest life insurer, is a world leader in the industry, with ¥138 trillion worth of life insurance in force, and premium income of ¥2.5 trillion in 1990. With almost 42,000 agents and 322 group representatives, Meiji Mutual is one of the world's largest life insurance companies. In Japan, from headquarters in Tokyo, stretches a network of about 100 regional offices, 9 group marketing offices, and almost 1,500 agency offices. In 1990 Meiji subsidiaries and affiliates were in 16 cities around the world.

In 1858 Japan's feudal, shogunate leadership was bankrupt and its peasants bowed by debt and taxation. The cry within Japan was for isshin, or restoration. The cry was to restore the emperor and expel the barbarians. The emperor, a 16-year-old boy who was given the name Meiji, meaning "enlightened rule," was restored, and was to rule for 44 years, before his death in 1912.

Another slogan of the day was bummei kaika, or civilization and enlightenment, and insurance was one of the businesses expected to contribute to this goal. Insurance was to provide economic security that would work to prevent retaliatory or immoral behavior in times of disaster.

Abe Taizo was one of the hundreds of Japanese businessmen who visited the West at Japanese government expense during the 1870s and 1880s, primarily to discover how to succeed in business. Taizo and his fellow students abroad returned to Japan and promptly went into business. Taizo founded, in July 1881, Japan's first life insurance company, which he named Meiji, after the emperor. Three other insurance companies were formed about this time, Tokyo Maritime Insurance Company and the Imperial and Nippon life companies. The fortunes of these companies were to run parallel and even converge in the decades to come.

In the 1880s the national fascination with things British led to basing premiums on British actuarial findings. British mortality, however, was steady until age 40, when it took a sharp rise; Japanese mortality took two sharp rises, at 20 and at 40. This discrepancy cost Japanese insurance firms.

In August 1989, Meiji Mutual was one of seven Japanese investors in an 18.25% share of the investment bank CS First Boston.

1902–1966

Meanwhile, the Meiji-era rulers--essentially managers trained under the shoguns--set the rules. They planned, built, and financed industries they thought the country needed. These were sold to the top families, such as Mitsui and Mitsubishi. Thus industries were established with a fair degree of efficiency.

By 1902 Japan had 37 life insurance companies, including three of foreign origin, which were sharply restricted by law. The early 1900s in Japan had a variety of economic ups and downs, but life insurance endured. Slightly over half of the coverage was offered by private, non-government-operated companies, of which there were 40 in 1929, compared to 50 fire insurance companies, 35 marine, and 29 transport. These private life insurance companies had issued 4.9 million policies by 1929. By 1929 there were ¥1.2 billion worth of new life policies a year in Japan, up from ¥278 million in 1914. The value of policies had jumped tenfold in ten years, though growth had waned in the last four. The number of insured per 1,000 population had risen from 29 in 1919 to 198 in 1929. In 1931, as the world reeled from the shock of depressed stock prices, 22 major life insurance companies in Japan, Meiji among them, formed an investment company, Life Insurance Securities, Ltd., to buy and hold reliable stocks for joint investment.

At the end of the 1930s, Meiji Mutual, now an affiliate of the Mitsubishi zaibatsu, or conglomerate, was one of the country's top four life insurance companies. Meiji and its three largest competitors all announced huge profits for 1939. Meiji's profit rate was only 120%, compared to Mitsui Life's 862% and Yasuda Life's 453%; Sumitomo Life earned 121%. Such profits were possible because life insurance companies were exempt from Japan's anti-profiteering law.

It is unclear precisely how Meiji Mutual fared during World War II, although the large zaibatsu did very well. In all likelihood, Meiji Mutual participated in financing the war, while insurance in force continued to grow. Meiji Mutual was not a part of a zaibatsu, despite its connection to Mitsubishi, which was a zaibatsu. In post-World War II Japan, Meiji Mutual was not, therefore, a target of U.S. occupation forces engaged in dissolving the zaibatsu. In that postwar era life insurance had fallen on particularly hard times. Life insurance companies such as Meiji Mutual suffered from loss of investment in demolished factories and from inflation. Not until the mid-1950s did Meiji and others reach a level of prosperity comparable to that of before the war. Life insurance recovered, however, before some enterprises, many of which remained somewhat depressed.

In following years the figures told a happier story. The number of policies had risen from 365 billion in 1948 to 1.78 trillion in 1954. The rise had been steady, at more than 30% a year, except for 1950, when it was 15%. In the next ten years life insurance continued to grow. Premium income rose sevenfold; insurance in force and assets grew ninefold. By August 1966 more than 50 million policies were in force, worth some ¥24 trillion, more than Japan's national income for 1965. Seven of ten Japanese households had some kind of life insurance, 53% from private companies such as Meiji Mutual, the rest from postal (government) life insurance and farm-cooperative aid societies. Japan was fourth in the world in the value of insurance in force, following the United States, Great Britain, and Canada. Per capita value of policies, however, was considerably behind these countries.

1961–1990

The 1970s brought a new union of sorts between Meiji Mutual and the onetime zaibatsu Mitsubishi, when Meiji Mutual joined a combine of interlocking but separate companies, all financial-service institutions, including Mitsubishi Trust & Banking Corporation and The Mitsubishi Bank. The fourth member of this high-powered group was Tokio Marine and Fire Insurance Company. The four pooled resources to form, in essence, a multi-service financial institution serving common clients. Remaining separate, they were immune from regulations forbidding involvement in each others' businesses.

In the 1970s Meiji Mutual began moving overseas. In 1971 it offered group benefit plans to Japanese companies operating outside Japan. Eventually it serviced these plans in cooperation with U.S., European, Asian, and Australian insurers. By the late 1980s Meiji was a major participant in two worldwide insurance networks, Swiss Life and AREA Benefits Network. Meiji Mutual expanded into Latin America in 1973, operating through a Brazilian company, the America Latina Companhia de Seguros, in São Paulo, of which it was a 10% owner, and through Tokio Marine and Fire Insurance.

In 1976 Meiji Mutual bought a majority interest in Hawaii-based Pacific Guardian Life Insurance Company, which had been established in 1961. In 1985 Meiji Mutual became Pacific Guardian's sole owner, the first Japanese company to own a U.S. life insurance company outright. By March 1990 Pacific Guardian was licensed to operate in 19 western states of the United States and on the islands of Guam and Saipan.

The 1980s were a time of considerable overseas expansion by Meiji Mutual. By 1990 its overseas investments--securities, loans, and real estate--amounted to ¥2.6 trillion, more than a quarter of its total assets. In 1989 alone overseas investments grew by ¥401 billion.

Meiji Mutual had continued to operate with the Mitsubishi Group, which listed Meiji Mutual as one of its insurance and credit affiliates, along with The Mitsubishi Bank, The Mitsubishi Trust & Banking Corporation, and Tokio Marine and Fire Insurance. Meiji Mutual computerized its operations in the late 1980s. Nationwide networks put its sales force in instant touch with corporate headquarters in Tokyo. In 1989 Meiji Mutual's new Meijiseimei Toyocho Building opened in Tokyo, housing its computer operations.

1987–1990

Meiji Mutual opened offices in New York City in 1987, the Meijiseimei Insurance Agency of New York; in Los Angeles in 1988, Meijiseimei Insurance Services of California; and later in San Francisco and Honolulu; and in Hong Kong in 1989, Meijiseimei International Hong Kong. In 1989 and 1990 Meiji Mutual also opened offices in Australia, the United Kingdom, and Canada. In August 1989, Meiji Mutual was one of seven Japanese investors in an 18.25% share of the investment bank CS First Boston. In March 1990, it acquired a 1% interest in The Hongkong and Shanghai Banking Corporation.

Meiji Mutual continued to pursue extensive cooperative ventures abroad, in 1988 with a British firm developing financial software; in 1989 with the Equitable Life Assurance Society on a number of fronts, including management of Meiji Mutual's international investments; and in 1990 with Dresdner Bank, with which Meiji was to share research.

On April 1, 1990, Meiji Mutual had a sudden movement of top officers. Hiroshi Yamanaka resigned as chairman of the board to become an advisor to the board; Terumichi Tsuchida moved to chairman from president; Kenjiro Hata became president. The apparent orderliness of the sudden moves bespeaks the apparent orderliness of Meiji Mutual's long existence.