Japan continues to be an attractive, diverse market from a security perspective, said George Sherriff, Chief Executive Officer, Gallagher Re Japan, noting that reinsurers have a lot of money and entered April 1, 2026, reforms are still looking for opportunities.
In an interview with Reinsurance News about April’s developments focused on Japan, Sherriff said trends are broadly consistent with those seen in 1.1, and the market continues to be characterized by well-intentioned reinsurers looking for pockets of growth during a general rate slowdown.
From a unique Japanese perspective, he said “reinsurers have entered the renewal looking for opportunities. But this is in a market where there is little new demand coming into the renewal period. So, with little demand, and a reinsurer with a lot of money, the strong demand will deviate in favor of the customer.
“The second point would be that in 2018 and 2019 there was a series of very important hurricanes that hit the market, and resulted in a significant recovery from the cat XLs. But after that, the rates increased, and then we had the heavy global market of ’22 and ’23, where the rates increased again. What we found, in general, is that the programs the latter is paid in full, and therefore has been paid in full.
Sherriff noted that this year marks the second consecutive year of strong double-digit declines in the Japanese crisis zone.
“If we look at the cat shows, overall, the Gallagher Re range was -15% to -17.5%, not much different from what we saw last year.” In this sense, Japan has moved forward, because from the point of view of the calendar year it should follow from 1.1.
He continued, “The other risk was -5% to -15&, and you’ll notice those risk adjustment movements are lower than in the cat programs. That’s because the exposure was already reduced, so they saw a significant reduction in income.
“Perhaps the victims were corrected, they increased by a small amount, but again, this is due to the fact that the exposure was very low, there was a significant reduction.
Sherriff emphasized that the main theme in Japan has been large companies that are preparing their core portfolios, which means that they are dealing with the core issues that have caused profitability challenges in recent years, such as the difficult results of trade fires and challenges from the US debt portfolio.
He said, “What they have been doing in recent years is to focus on reducing margins, pushing rates, adding less capital, reducing shares or exiting businesses that are no longer aligned with their direction.
“That resulted in two things in this update. One, the results of the protection support programs have been very good. To cover the commercial fire, you have the property programs with the risk including the remaining alliances, and for the victims, you have the XLs of the independent liability or the joint programs of the victims. And their performance has improved, but therefore, the opportunities have been greatly reduced. movements for another risk and one and the risk seems to be lower than the cat, but the real story is about the exposure process, so it is associated with high-level movements for those programs.”
Sherriff added that improved portfolio performance, combined with increased reinsurer appetite, has enabled clients to push for higher commissions.
“In commodity surplus deals, commissions have increased because the core business has improved, and quota share deals have also increased. The earthquake quota segment is still one of the most attractive businesses in Japan. The underlying environment is still very good. The loss history has been very good after Tohoku.
He also noted that personal injury programs have been greatly affected by the loss of COVID-19, but this year Gallagher Re has seen a large and strong demand from the insurance industry for this placement.
“They’re interchangeable, they’re more flexible than the ones below, so consumers have also taken advantage of some of the protections that were restricted after COVID-19. The COVID-19 restrictions are still there, but some of the infectious disease restrictions have been lifted, that’s another improvement we’ve seen.
“But when we step back and look at the broader market, it wasn’t really an innovation that was focused strongly on safety and form. It was an innovation where customers wanted to reduce those values that showed a strong effort on the base portfolio,” said Sherriff.
He added that cyber is still a very attractive business in Japan, with small businesses focusing on SMEs. Clients have achieved an increase in commission, which he said reflects strong demand for the line as well as excellent performance.
Sherriff also gave an overview of the broader Asian market at 1.4, saying: “I can’t say that there is so much difference in what I described, except that, of course, the difference in the article, refund, etc., is very focused in Japan. I think, again, that the simple methods that we saw in Japan were as important as the rest of Asia, without any programs that had losses.
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