Risk Management by Mitsubishi
Risk Management by Mitsubishi
From Self-Insurance to Captive Insurance
This chapter investigates the Mitsubishi Corporation’s risk management business in pre-war Japan. Mitsubishi self-insured from 1898 following the withdrawal of a special discount provided by its main insurance supplier, the Tokio Marine. In 1917, each department within Mitsubishi was reorganized into independent stock companies, but legislation prevented Mitsubishi from underwriting the risks of these subsidiaries. As a solution, despite opposition from the Tokio Marine, Mitsubishi established a captive insurer, the Mitsubishi Marine and Fire Insurance Company, in order to pool the risks faced by its subsidiaries. In consequence, antagonism grew between the two insurance companies, but this was eventually resolved with an exchange of top executives. Mitsubishi then abandoned this early experiment in captive insurance. Mitsubishi provides an interesting example of an industrial corporation managing risk through changes in the organizational vehicle by which its insurance cover was supplied.
Keywords: risk management, Mitsubishi, self-insurance, captive insurance, marine insurance
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