Autobacs Seven and US insurance giant AIG Group have agreed to join forces and set up a joint venture company, which will aim to prepare for the establishment of a general insurance business in Japan.

Under the terms of the agreement, Autobacs will hold a 65% shareholding in the proposed general insurance company, while AIG’s AIU Far East Insurance Holdings unit will own the remaining 35%. The jointly-owned business will be headquartered in Tokyo and has not yet been named.

At present, both companies are developing the business plan for the new general insurance business, as well as the preparation for the business infrastructure. An application has also been sent off for a license to establish a general insurance operation in the country.

Autobacs believes that by selling new insurance products through the joint venture, it will enhance its product line-up for its car-life business. In addition, it will also boost the business growth of the group through synergy with existing businesses.

Meanwhile, AIG will support the joint venture’s new businesses by providing business know-how accumulated through selling general insurance products and providing customer services. It also plans to have certain reinsurance revenues and thus enhance its business basis.