Two of Japan's major non-life insurance firms say they are preparing to merge in April 2027.



The integration of third- and fourth-ranked firms Mitsui Sumitomo and Aioi Nissay Dowa would create the country's number one company in the sector.



With annual sales of about 19 billion dollars, the new firm would overtake Tokio Marine & Nichido Fire.



The two insurers are both under the umbrella of MS&AD Insurance Group Holdings and have been working together in product development.



The merger is aimed to improve management efficiency through system integration. They plan to secure stable profits by accelerating investments in overseas and digital businesses.



The decision comes as non-life insurers in Japan are struggling to make profits as disasters in the country become increasingly severe.



The shrinking population and declining car ownership among young people are also cutting into auto insurance revenues.