Japan's Yamato Life Insurance firm has succumbed to global market turmoil stemming from the subprime crisis. Yamato Life Insurance Co is an unlisted midsized insurer. It failed with $2.7bn in debt on Friday and became the first Japanese financial institution to collapse at a time of global financial crisis began in US.

 

Economics Minister of Japan Kaoru Yosano said that Yamato is the smallest company in Japan's insurance sector. Commenting on the failure of the firm, Masanaga Kono, a strategist at Societe Generale Asset said that it didn't fail because Japan's financial system wasn't working right, or liquidity in Japan stalled or anything like that.

 

According to Yosano, the incident of failure of the company is typical for it has had a unique business model and was taking bigger risks than it should have taken. On the other hand, Yamato informed that it had been actively pursuing investment returns to cover high operational costs, allocating a relatively big proportion of its investments to alternative assets, including hedge funds.