Yasuda, Nissan form insurance giant

staff and wire reports

TOKYO, Japan (CNN) -- Yasuda Fire & Marine Insurance and Nissan Fire & Marine Insurance have merged to form Japan's second largest non-life insurer.

The new company, Sompo Japan Insurance Inc, will be second only to Millea Holdings Inc as Japan's biggest property and casualty insurer, with net insurance premiums of about Y1.2 trillion (about $10 billion).

"We aim to become a comprehensive service group for risk and asset management, maintaining core non-life insurance operations and boosting the life insurance and asset management businesses", President Hiroshi Hirano said Monday, according to the Nikkei web site.

Hiroshi was previously president of Yasuda Fire.

The creation of Sompo means Japan's insurance market will likely be dominated by three companies: Sompo, Millea and Mitsui Sumitomo Insurance Co.

Millea Holdings Inc was set up in April by Tokio Marine and Nichido Fire. Mitsui Sumitomo was created through the merger of Mitsui Marine and Sumitomo Marine late last year.

Yasuda and Nissan had originally planned a three-way merger with Taisei Fire & Marine Insurance Co, but plans were shelved when Taisei went bankrupt after claims related to the September 11 terror attacks in the United States.

Intense competition flowing from Japan's industry deregulation has caused difficulties for smaller insurers, but major non-life insurers have experienced strong revenue growth.