Mitsui Sumitomo Insurance Group (MSIG), set to become one of the world's biggest insurance companies after a planned merger with two other insurance companies, is keen on acquisitions in China and India.

"I think we will put priority in Asian mergers and acquisitions, especially China, India and Vietnam," MSIG president Toshiaki Egashira told reporters. "It does not mean that we have absolutely no interest in the US. But the US market has lower priority than Asia."

An MSIG spokesperson added that MSIG is eyeing life and non-life insurance companies, especially reinsurance businesses, in China and India, along with the Southeast Asian region.

Unlike number-one rival Tokio Marine, which has been aggressively building its operations in the US through acquisitions, MSIG's overseas forays have so far been focused in Southeast Asia and Europe. Thanks to its recent acquisition of Aviva's entire Asian operations and Mingtai, Taiwan's second-largest non-life insurer, in 2005, the spokesperson said MSIG is currently one of the top five players in almost every Southeast Asian country.

Its announced on Friday that it would integrate with two other Japanese non-life insurance companies - Aioi Insurance and Nissay Dowa – making it Japan's biggest non-life insurance company. "This [the integration] is the best opportunity to change the landscape of the insurance industry. The combined premium revenues of the three will make the integrated company the fifth largest in the world," Egashira said.

Egashira added, "This is the best combination we can think of. We have operational bases in 38 countries. We can build a strong customer base worldwide by combining a global sales network of Toyota, Nippon Life as well as the Mitsui and Sumitomo groups."

MSIG's aggressive foray reflects the shrinking customer base at home as a result of Japan's aging population and a drastic fall in auto-insurance premiums caused by dwindling auto sales. After the press conference announcing the integration plan, Egashira said, "We have absolutely no M&A plans in Japan for now."

The planned integration will also make it possible for MSIG to cut considerable costs for system operations. "The integration will enable us to cut operational costs by 20-30 per cent or 20 billion yen ($224.7 million)," said Egashira.

The MSIG spokesperson said the linkup with Toyota affiliate Aioi would enable the combined company to seek acquisitions in Europe, especially north and east Europe, as well as Russia, by exploiting Toyota's plants in these regions.