NIPPON LIFE, SHEARSON TIE-UP SEEN SETTING TREND

  Nippon Life Insurance Co's 538 mln dlr
  purchase of a 13 pct stake in Shearson Lehman Brothers Inc
  brokerage unit is a shrewd move that other Japanese insurers
  are likely to follow, securities analysts said.
      The investment in one of Wall Street's top brokerage houses
  is likely to pay off in dollars and international market
  position, they said. "It's part of a trend towards growing
  capital participation by Japanese insurance firms in foreign
  financial institutions," said Simon Smithson, an analyst with
  Kleinwort Benson International Inc in Tokyo.
      The investment in Shearson Lehman, a growing firm described
  by some analysts as the top U.S. Retail brokerage, will give
  Nippon Life a ringside seat and possibly lower commissions on
  Wall Street, where it invests an increasing percentage of its
  assets of 90.2 billion dlrs, they said.
      Nippon Life staff will also acquire expertise in business
  sectors which have not yet opened up in Japan, they added.
      The agreement between the two companies calls for a 50-50
  joint venture in London focussing on investment advisory asset
  management, market research, and consulting on financing.
      Nippon Life is Japan's largest insurance company and the
  world's biggest institutional investor, analysts said.
      The Japanese finance ministry is expected to approve the
  deal in April, making Nippon Life the first Japanese life
  insurance firm to take a stake in a U.S. Financial firm.
      The limit on foreign assets as a proportion of Japanese
  insurers' assets was increased to 25 pct from 10 pct last year.
  Since then, they have stepped up purchases of foreign stocks
  and sought to deepen their understandng of foreign markets and
  instruments.
      Last year, a Sumitomo Life Insurance Co official was
  appointed to E.F. Hutton Group Inc unit E.F. Hutton and Co's
  board and Sumitomo Bank Ltd spent 500 mln dlrs to become a
  limited partner in Goldman, Sachs and Co.
      Smithson said Japanese banks started buying smaller and
  problem-plagued banks in 1984. "But now Japanese are going for
  blue-chip organisations," he said.
      "It's a reflection of what has happened in manufacturing
  industries," said Brian Waterhouse at James Capel and Co. "With a
  historically high yen, and historically low interest rates,
  there's an increasing disincentive to invest in Japan."
      Competition in fund management has grown along with greater
  Japanese savings. The typical salaried employee has 7.33 mln
  yen in savings, reflecting an annual average savings rate of 17
  to 18 pct, he said.
      To stay competitive, fund managers must invest overseas and
  gain experience with financial instruments which are likely to
  spread to Japan with further deregulation. "The high regulatory
  environment has delayed (life insurance firms')
  diversification. Now there's a growing number of new products
  in an environment of increasing competition for performance on
  fund management," Smithson said.
  

