London: Japan’s Yamato Life Insurance has filed for bankruptcy with $2.7 billion in liabilities, to become the first financial sector casualty of US credit crisis in Japan, according to media reports.

“Yamato Life Insurance on Friday became the first direct financial sector casualty in Japan of the US sub-prime mortgage crisis, filing for bankruptcy with ¥269.5 billion in liabilities,” the Financial Times reported.

According to the report, the failure of Yamato Life, which is a medium-sized life insurance company, is the first collapse of a Japanese insurance company in seven years.

The insurance firm’s bankruptcy follows the collapse of Japan’s first listed real estate investment trust (Reit), New City Residence Investment, which failed with ¥112.3 billion in debts yesterday.

“The failure of Yamato and New City Residence highlights the impact that the global credit turmoil is having on Japan, even though the country is not suffering from the liquidity problems that have beset other major markets,” it said.

Financial Times quoting analysts said that Yamato Life failed largely because of its problematic investments in securitisation products, rather than as a direct result of problems in the domestic insurance market.