UPDATE 1-Three Japan insurers in merger talks - TV

TOKYO, Dec 28 (Reuters) - Japan's Mitsui Sumitomo Insurance Group Holdings Inc, Aioi Insurance Co Ltd and Nissay Dowa General Insurance Co Ltd are in final talks on merging under a holding company as early as next autumn to form the country's top non-life insurer, national broadcaster NHK reported on Sunday.Sales of automobile and housing sales have been sluggish amid the economic downturn, hitting demand for car and fire insurance and weighing on the profitability of non-life insurers, prompting them to seek ways to boost competitiveness.The three aim to reach a basic agreement on the deal as early as next month, NHK added.Officials from the companies were not immediately available for comment.The merger of Japan's No.2, No.4 and No.6 non-life insurers would create the biggest player in the domestic market with revenue of about 2.7 trillion yen ($29.8 billion), NHK said. That would top current top non-life insurer Tokio Marine Holdings I