Japan’s
Insurance
Market2024

Japan’s Insurance Market 2024
ContentsPage

To Our Clients
Masaaki Matsunaga
President and Chief Executive
The Toa Reinsurance Company, Limited

1

1. Japan: A Disaster-Prone Country
Nobuo Fukuwa
Professor Emeritus, Nagoya University
Director, Aichi/Nagoya Resilience Co-Creation Center2

2. Comprehensive View of Risk for Japan for Robust Risk Management
Kazuya Fujimura, Managing Director & Vice President, Verisk Extreme Event Solutions
Ivelin Zvezdov, Assistant Vice President, Verisk Extreme Event Solutions
Jay Guin, Executive Vice President, Verisk Extreme Event Solutions

12

3. Trends in Japan’s Non-Life Insurance Industry
Non-Life Underwriting & Planning Department 1
Non-Life Underwriting & Planning Department 2
The Toa Reinsurance Company, Limited

20

4. Trends in Japan’s Life Insurance Industry
Life Planning Department
The Toa Reinsurance Company, Limited

Company Overview©2024 The Toa Reinsurance Company, Limited. All rights reserved.
The contents may be reproduced only with the written permission of The Toa Reinsurance Company, Limited.

30
35

To Our Clients

It gives me great pleasure to have the opportunity to welcome you to our publication, “Japan’s InsuranceMarket 2024.” It is encouraging to know that over the years our publications have been well received evenbeyond our own industry’s boundaries as a source of useful, up-to-date information about Japan’s insurance
market, as well as contributing to a wider interest in and understanding of our domestic market.
The business environment surrounding the insurance and reinsurance industries is changing rapidly
and substantially every day. The risks they face are becoming increasingly diverse and complex, with theadvancement and spread of digital technologies, the intensifying severity of natural disasters resulting fromglobal warming, changing demographics in the form of a falling birthrate and aging population, andincreasing geopolitical risks such as Russia’s invasion of Ukraine. Furthermore, the experience of the
COVID-19 pandemic has transformed the global economy and the way people live and work. Amid thesedramatic changes in all aspects of society, the role demanded of insurance and reinsurance is also
undergoing a significant transformation.
Under these circumstances, the Toa Re Group formulated “KIZUNA 2026,” our new medium-term
management plan, and launched it in April 2024. The name “KIZUNA 2026” is intended to enhancemutual trust and deepen the “bond” between all officers and employees of the Toa Re Group, thereby further
improving the Group’s ability to respond to issues, and thereby strengthening the “connection” withcustomers and various other stakeholders, with the aim of achieving sustainable growth together.
In addition, “KIZUNA 2026” sets “Promotion of climate change countermeasures,” “Respect forhuman rights and promotion of D&I,” and “Strengthening of internal control” as the three main tasks,
with the aim of realizing a sustainable society and further enhancing the Group’s corporate value.
Everyone at the Toa Re Group will do their utmost to ensure that the Group consistently fulfills its mission
as a reinsurance company of “Providing Peace of Mind,” as articulated in the Toa Re Mission Statement.
We decided to issue this year’s publication exclusively in electronic form, in recognition of the role that
we all have in considering the environment and sustainability. I hope that our publication continues toprovide a greater insight into the Japanese insurance market, and I would like to express my gratitude to all
who kindly contributed so much time and effort towards its making.

Masaaki Matsunaga
President and Chief Executive
The Toa Reinsurance Company, Limited1

1.
1. Introduction

Japan: A Disaster-Prone Country
Nobuo Fukuwa
Professor Emeritus, Nagoya University
Director, Aichi/Nagoya Resilience Co-Creation Center

The Japanese archipelago, on the western edge of the Pacific Ocean, is on theboundary of four plates in the Asian monsoon zone. This arcuate archipelago with alarge amount of coastal land was created by the subduction of two oceanic plates (thePhilippine Sea Plate and the Pacific Plate), beneath the two continental plates (theEurasian Plate and the North American Plate) (Figure 1). Huge subduction zone
earthquakes occur at the boundaries between continental and oceanic plates, and crustal
earthquakes occur due to active faults in shallow inland areas. Representative earthquakesof the former are Nankai Trough earthquakes, Sagami Trough earthquakes (the Kanto
Earthquake, etc.), and earthquakes along the Japan Trench (the Great East Japan
Earthquake, etc.), and examples of the latter are Southern Hyogo Prefecture earthquakes(the Great Hanshin-Awaji Earthquake, etc.) and Noto Peninsula earthquakes.
Seawater taken underground along with the oceanic plates dissolved the mantle
on top of those plates, creating magma and a series of volcanoes. Japan’s mountain
ranges are interlinked with these volcanoes and absorb seasonal winds, which resultsin substantial rain. Typhoons also strike frequently. Japan’s mountains were formedby volcanic ejecta and are therefore steep and prone to collapse, while the nation’srivers are short and steep, making them prone to flooding and landslides. The
country is mountainous and has little flat land, so residential areas are limited tolowlands near river mouths and land in valleys, where the ground is soft and the riskof earthquakes and floods is high. Thus, Japan has a unique geographical character
created by the movement of tectonic plates as part of the workings of the Earth.
Although it is a country with beautiful scenery and a warm climate, it is alsofrequently exposed to earthquakes, volcanoes, wind and flood damage, and groundFigure 1: The Japanese Archipelago from the Perspective of Plate Tectonics
Volca nic

front

lc
Vo

North American
Plate J

ap

an

an

ic fron

Tr
en

ch

t

Pacific Plate

Eurasian Plate
Co
nt i

Vol
ca

k

I zu

Philippine Sea Plate

ugh

f ro

nt

Og

a sa

wa r

a
ea n
O c e nc htr

icVolcan

st

le

Ma

a nt

cr u

er m

ta l

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Up

ne n
Na n

ro
ai T

n ic

e

front

nt l

cti
du
ub
Pl a

te s

nt am
st Co
Oc ea nic cru
leof ma gma
Upper ma nt
Formationon

cru stination withof thelved are as
Pa rtial dissosubjected to water
ma nt leMantleSource: Japan Geotechnical Consultants Association, https://www.zenchiren.or.jp/tikei/

2st
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The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

disasters. Indeed, nature in Japan is both a loving mother and a stern father, and has
led to the formation of a unique Japanese culture that finds ways to compromisewith nature. Something that I have noticed is that villages are generally built to
avoid areas with high disaster risk.

2. The Japanese
History andSociety with
Strong Impact
of Disasters

I feel Japan has historically undergone major changes when various disasters
such as earthquakes, volcanic eruptions, heavy wind and flooding, and infectious
diseases overlapped. In particular, Nankai Trough earthquakes, which have affected awide area of western Japan, are often preceded and followed by earthquakes causedby active faults inland and therefore coincide with turning points in the nation’s
history. As shown in Figure 1, the Nankai Trough is a depression in the ocean floor
on the Pacific side of western Japan that was created by the subduction of thePhilippine Sea Plate under the Eurasian Plate. As shown in Figure 2, massive
earthquakes have occurred at this location at intervals of 90 to 150 years.
Earthquakes occur in a variety of ways, with some instances destroying the entire
epicenter area at once, and others occurring separately in the east and west. The
following is an example drawn from the last three Nankai Trough earthquakes.
At the beginning of the 18th century, the Genroku Kanto Earthquake occurredon December 31, 1703, and four years later on October 28, 1707, the Hoei
Earthquake occurred, during which the entire Nankai Trough epicenter area was activeat the same time. Furthermore, 49 days later, Mt. Fuji erupted, and the following year,in 1708, a huge fire occurred in Kyoto. Japan’s three major metropolitan areas, theKanto, Tokai, and Kinki regions, were affected by these disasters, which brought an
end to the affluent society of the Genroku era (the name of the Japanese era, from1688 to 1704) and ushered in an era of simplicity and frugality.
On December 23 and 24, 1854, the Ansei Tokai Earthquake and the Ansei
Nankai Earthquake occurred in succession to the east and west of the epicenter areaof the Nankai Trough. The following year, on November 11, 1855, the Ansei Edo
Earthquake occurred. Around this time, many earthquakes occurred inland, atyphoon hit Edo (current Tokyo) directly, and a cholera epidemic broke out.
Subsequently, the Edo era (from 1603 to 1868) ended and the Meiji era (from 1868
to 1912) began.
On December 7, 1944 and December 21, 1946, the Showa Tonankai
Earthquake and the Showa Nankai Earthquake occurred, respectively. The period
before and after both earthquakes was one of the most difficult periods in Japanese
history. In 1917, a storm surge hit the area around Tokyo Bay; in 1918 the Spanish
flu broke out; and in 1921 Prime Minister Takashi Hara was assassinated. Then, on
September 1, 1923, the Great Kanto Earthquake occurred, killing 105,000 people
and causing economic damage three to four times the national budget. This
earthquake led to the introduction of Japan’s first earthquake-resistant regulations
for buildings, and the improvement of Tokyo’s urban infrastructure through the31. Japan: A Disaster-Prone Country

imperial capital reconstruction plan. The 25 years following the Great Kanto
Earthquake were a period of frequent disasters. These included the Kita-Tajima
Earthquake in 1925, the Kita-Tango Earthquake in 1927, the Kita-Izu Earthquake
in 1930, the Showa-Sanriku Earthquake in 1933, the Muroto Typhoon in 1934, theTottori Earthquake in 1943, the Showa Tonankai Earthquake in 1944, the Mikawa
Earthquake and the Makurazaki Typhoon in 1945, the Showa Nankai Earthquake
in 1946, Typhoon Kathleen in 1947, and the Fukui Earthquake in 1948. During
this period, Japanese society became militaristic and the country entered the Second
Sino-Japanese War and World War II, leading to its defeat. One of the factors in thisdefeat was great damage from the Showa Tonankai and Mikawa earthquakes in thearea around Nagoya, where munitions factories were concentrated. Although Japan

MurotoBasin

Nankai Troughaw aFuji k°°140

Based on data provided by the Japan Coast Guard

136
°

°

Omaez aki

Kumano Basin Enshu Basin

32
°

134

°

132
°

30

Da ioza ki

Cape Mu roto

Tosa Basin

138

Hyuga Basin

Cape Shiono

130°

Cape Toi

32°

Cape Ash izu ri

Figure 2: Historical Occurrences of Nankai Trough Earthquakes

Year 600
684 Hakuho (Tenmu) Earthquake
800
887 Ninna Earthquake
1000

1096 Eicho Tokai Earthquake
1099 Kowa Nankai Earthquake

1200

1361 Shohei (Koan) Tokai Earthquake
1361 Shohei (Koan) Nankai Earthquake

1400

1498 Meio Earthquake
1600

1605 Keicho Earthquake(1662)

1707 Hoei Earthquake
1800(1968)

2000

Hyuganada

NankaiTokai

1854 Ansei Tokai Earthquake
1854 Ansei Nankai Earthquake
1944 Showa Tonankai Earthquake
1946 Showa Nankai Earthquake

Definite epicenter area
Epicenter area considered certain
Possible epicenter area
Hypothetical epicenter area
Earthquakes highly likely to cause tsunamiInterplate earthquake in Hyuganada (M7 class)
Source: Headquarters for Earthquake Research Promotion

4

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

was in a difficult situation due to the damage from the earthquakes and the war,
special procurement beginning in 1950 for the Korean War helped Japan revive
industrially and return to the international community. In the same year, theBuilding Standards Act was enacted and earthquake resistance standards were
established.
In the 1950s, typhoons that killed more than 1,000 people occurred almost
every year, and the Isewan Typhoon (Typhoon Vera) that struck in 1959 caused as
many as 5,000 casualties. Japan responded in 1961 by enacting the Basic Act on
Disaster Management, which was akin to a constitution for disaster countermeasures.
Since then, flood control measures such as dams and levees have been implemented,
and the number of victims of wind and flood damage has decreased dramatically(Figure 3). Japan achieved rapid economic growth in the 1960s and 1970s, partly
because it was a relatively quiet period for earthquakes. On the other hand,overconfidence in flood control measures seems to lead to the expansion of urban
areas into regions with high disaster risk. This may be one of reasons whyearthquakes in recent years have caused tremendous damage.

Figure 3: Transition in Natural Disaster Casualties

20,00015,00010,0005,000
0The number of victims by natural disasters excluding earthquakes with over 100 dead or missing
The number of victims by earthquakes with over 100 dead or missing
Mikawa Earthquake: 2,306
Makurazaki Typhoon: 3,756
Showa Nankai Earthquake: 1,443
Typhoon Kathleen: 1,930
Fukui Earthquake: 3,769
Nanki heavy rain: 1,124
Toyamaru Typhoon: 1,761

Great East Japan Earthquake:
22,288Great Hanshin-Awaji Earthquake:
6,437

Isewan Typhoon: 5,098

Kumamoto
Earthquake in
2016: 273
Hokkaido
Eastern Iburi
Earthquake in
2018: 43
Boso Peninsula
Typhoon(Typhoon Faxai)
and East Japan
Typhoon(Typhoon
Hagibis) in 2019

1945
1947
1949
1951
1953
1955
1957
1959
1961
1963
1965
1967
1969
1971
1973
1975
1977
1979
1981
1983
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019

25,000Source: Disaster Management in Japan, https://www.bousai.go.jp/kaigirep/hakusho/r04/honbun/3b_6s_07_00.html

Subsequently, the 1968 Tokachi-oki Earthquake and the 1978 Miyagi-oki
Earthquake caused major damage to reinforced concrete buildings. New seismic
standards were therefore introduced in 1981. The Great Hanshin-Awaji Earthquake
in 1995 damaged many buildings that met the old earthquake resistance standards,
so the Act on Promotion of Seismic Retrofitting of Buildings was enacted.
Furthermore, the Great East Japan Earthquake in 2011 brought tsunami damage,nuclear disasters, and long-period earthquake ground motion problems in high-risebuildings into the spotlight. Japan implemented national resilience measures in
response, along with countermeasures against Nankai Trough earthquakes and longperiod earthquake ground motion for high-rise buildings.

5

1. Japan: A Disaster-Prone Country

Table 1 shows the earthquakes that caused major damage, leading to socialchange, countermeasures, and legal developments since the start of the 20th century.
It also shows how Japan implemented various countermeasures in the wake ofearthquake damage.

Table 1: Disasters That Caused Major Damage, Leading to Social Change, Countermeasures, and Legal
Developments since the Start of the 20th Century
Year

Natural Disasters and Infectious Diseases

1917

Tokyo Bay storm surge damage
Spanish flu epidemic (up to 1921)

1918

Etorofu-oki Earthquake

Social Events

1919

Urban Area Building Law and City Planning Law enacted

1921

Ryugasaki Earthquake

1922

Eastern Kanagawa Earthquake

1923

Great Kanto Earthquake

Assassination of Prime Minister Takashi Hara
Imperial Capital Reconstruction Board established (Board
president Shinpei Goto)
Urban Area Building Law revised (new earthquake
resistance regulations established)

1924
1925

Kita-Tajima Earthquake

Maintenance of Public Order Act and Universal Manhood
Suffrage Act

1927

Kita-Tango Earthquake

Financial Crisis

1930

Kita-Izu Earthquake

1931

West Saitama Earthquake

1932

May 15th Incident
Showa Sanriku Earthquake

Withdrawal from the League of Nations

1936

Kawachi Yamato Earthquake

February 26 Incident

1937

Second Sino-Japanese War begins

1941

Start of World War II

1944

Showa Tonankai Earthquake

Bombing of munitions factories in Nagoya

1945

Mikawa Earthquake
Makurazaki Typhoon

Tokyo and Nagoya great air raids
Battle of Okinawa & Atomic bombs dropped on Hiroshima
and Nagasaki
End of World War II

1946

Showa Tokai Earthquake

1947

Typhoon Kathleen

1948

Fukui Earthquake
Special procurement for Korean War

1955

High economic growth period (up to 1973)1978

Building Standards Act enacted

Isewan Typhoon
Tokyo Olympics, Tokaido Shinkansen began operating
Osaka Expo (1970)
Basic Act on Disaster Management enacted (1961)
Sapporo Olympics & the reversion of Okinawa to Japan (1972)
Miyagi Prefecture-Oki Earthquake

Act on Special Measures Concerning Countermeasures forLarge-Scale Earthquakes enacted
Building Standards Act revised (new seismic standards
introduced)

1981
1995

Great Hanshin-Awaji Earthquake

2011

Great East Japan Earthquake

2013
2020

War Damage Reconstruction Board established
Basic Policy for the Reconstruction of War-damaged Areas
enactedEnforcement of the Constitution of Japan

1950

1964

6

Manchurian Incident

1933

1959

Countermeasures and Legal Developments

Act on Promotion of Seismic Retrofitting of Buildings
and Act on Special Measures for Earthquake Disaster
Countermeasures enacted
Basic Act for National Resilience enacted

COVID-19 epidemic

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

3. Increasingly
Severe Wind andFlood Damage

In recent years, wind and flood damage that exceeds the level of existing flood
control measures has been increasing due to factors including the effects of climatechange. Table 2 is a list of severe meteorological disasters named by the Japan
Meteorological Agency. The left side of the table shows disasters from the latter halfof the Showa era (1954-1988), and the right side shows disasters from the Heisei era
onwards (from 1989). Comparing the left and right, such typhoons occurred
frequently during the Showa era, and heavy rain has occurred frequently since thebeginning of the Heisei era.
Figure 4 shows the number of annual occurrences of rainfall with an hourly
precipitation of 50 mm or more, indicating increasing occurrence of severe
torrential rain. As the risk of flood damage increases, the limits of flood control
measures are becoming clear due to financial difficulties. The Ministry of Land,
Infrastructure, Transport and Tourism has therefore proposed the concept of basin
flood control. This involves securing places to store overflowing water, along withlocation optimization initiatives to keep people from living in dangerous areas.

Table 2: Weather-Related Disasters Named by the Japan Meteorological Agency
1.

Toyamaru Typhoon

September 1954
(Typhoon No. 15, Marie)

17. Heavy rain, August 1993

2.

Kanogawa Typhoon

September 1958
(Typhoon No. 22, Ida)

18.

3.

Miyakojima Typhoon

September 1959
(Typhoon No. 14, Sarah)

19. Fukui heavy rain, July 2004

July 17-18, 2004

4.

Isewan Typhoon

September 1959
(Typhoon No. 15, Vera)

20. Heavy snowfall, 2006

Winter 2006

5.

Rainy season front heavy rain,
1961

June 24-July 10, 1961

21. Heavy rain, July 2006

July 15-24, 2006

6.

Second Muroto Typhoon

September 1961
(Typhoon No. 18, Nancy)

22. Heavy rain, August 2008

August 26-31, 2008

7.

Heavy snowfall, January 1963

Heavy snow mainly in the Hokuriku
region23.

Heavy rain in Chugoku andnorthern Kyushu, July 2009

July 19-26, 20098.

San’in Hokuriku heavy rain,
July 1964

July 18-19, 1964

24.

Niigata and Fukushima heavy
rain, July 2011

July 27-30, 2011

9.

Second Miyakojima Typhoon

September 1966
(Typhoon No. 18, Cora)

25.

Heavy rain in northern
Kyushu, July 2012

July 11-14, 2012

10. Heavy rain, July 1967

July 7-10, 1967

26. Heavy rain, August 2014

11. Third Miyakojima Typhoon

September 1968
(Typhoon No. 16, Della)

27.

Heavy rain in Kanto andTohoku, September 2015

September 9-11, 2015

January 30-February 2, 1970

28.

Heavy rain in northern
Kyushu, July 2017

July 5-6, 2017

13. Heavy rain, July 1972

July 3-13, 1972

29. Heavy rain, July 2018

June 28-July 8, 2018

14. Okinoerabu Typhoon

September 1977
(Typhoon No. 9, Babe)

30. Boso Peninsula Typhoon, 2019

September 2019
(Typhoon No. 15, Faxai)

15. Heavy rain, July 1982

July 23-25, 1982

31. East Japan Typhoon, 2019

October 2019
(Typhoon No. 19, Hagibis)

16. Heavy rain, July 1983

July 20-23, 1983

32. Heavy rain, July 2020

July 3-31, 202012.

Low pressure system,
January 1970

Niigata and Fukushima heavy
rain, July 2004

July 31-August 7, 1993
July 12-13, 2004

July 30-August 26, 2014

Source: Japan Meteorological Agency, https://www.jma.go.jp/jma/kishou/know/meishou/meishou_ichiran.html

7

1. Japan: A Disaster-Prone Country

Furthermore, the 2020 revision of Regulation for Enforcement of the Real
Estate Brokerage Act mandated the explanation of flood hazards when conducting
real estate transactions. In addition, heavy rain and strong ground motion can cause
events including landslip, debris flows, and landslides, so land use has been
restricted through the designation of landslide-prone areas. Each local government
publishes hazard maps for such issues as open water flooding caused by riverflooding, inland water flooding caused by insufficient drainage capacity, and damage
from landslides.

Figure 4: Annual Occurrences of Hourly Precipitation of 50 mm or More
(From Cabinet Office materials)

Number of occurrences per 1,300 points

500
450

Trend = 28.7 (occasions per 10 years)

400
350
300
250
200
150
100
50
0
1975

4. Imminent
Earthquake
Disasters

8

Trend
Simple Moving Average in 5 years

Japan Meteorological Agency
1980

1985

1990

1995

2000
Year

2005

2010

2015

2020

Over 100 years have passed since the 1923 Great Kanto Earthquake. Figure 5
shows the locations of massive earthquakes (M8 class) that have occurred around theJapanese archipelago since the Great Kanto Earthquake. There have been 11
earthquakes in total, and an M8 class earthquake occurs approximately once every
10 years. The diagram indicates that fewer earthquakes occur west of the Kanto
region. The massive earthquakes that have occurred there are Nankai Troughearthquakes and Kanto earthquakes. The occurrence of super-large earthquakes
along the Japan Trench and Kuril Trench are also a concern.
The Headquarters for Earthquake Research Promotion publishes a nationwide
seismic hazard map based on long-term evaluations of various earthquakes. Figure 6
shows the probability distribution for ground motion with a seismic intensity of
6-lower or more over the next 30 years. The map predicts the probability of adisastrous earthquake as high in the vicinity of major faults, in addition toearthquakes directly beneath metropolitan areas, in the Nankai Trough, and along
the Japan Trench and Kuril Trench.

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

Figure 5: Massive Earthquakes throughout the Japanese Archipelago over the
Past 100 Years
Depth of Hypocenter [km]

1958
2003
1952
1968

1963
1994

1933
2011
1923
1944
1946

Source: Japan Meteorological Agency, https://www.data.jma.go.jp/eqdb/data/shindo/

Therefore, the Central Disaster Management Council has been making
earthquake damage estimates for these earthquakes, and the amount of damage
would be far greater than that of the Great East Japan Earthquake in 2011. In
particular, a Nankai Trough earthquake is predicted to cause severe damage, withhalf of the nation’s population affected, 323,000 direct deaths and 2.38 million
houses completely destroyed, in the worst imaginable case. This is 15 times thedamage caused by the Great East Japan Earthquake.
Tsunami would cause most of the predicted deaths, and ground motion and firewould be the main causes for about 90% of the complete destruction of houses.
Even if houses do not completely collapse or burn down due to ground motion,
tsunami will wash them away in the areas they affect. The predicted number ofcompletely destroyed houses would be three times the annual number of houses
built in Japan. Therefore, building disaster-resilient houses in which people cancontinue to live is of the utmost importance.
Furthermore, a large number of disaster-related deaths are expected due to thelack of disaster response resources such as evacuation shelters, medical care, welfare
and nursing care. In addition, more than 60% of facilities of Japan’s manufacturingindustries are located in the disaster-prone areas. Japanese industry will lose its
international competitiveness if it does not recover quickly. Industrial facilities thatcan remain in operation after an earthquake will be as important as housing.
91. Japan: A Disaster-Prone Country

Earthquakes along the Nankai Trough often occur separately in the east andwest of the epicenter area, with the Showa Tonankai Earthquake and the Showa
Nankai Earthquake occurring two years apart and the Ansei Tokai Earthquake andthe Ansei Nankai Earthquake occurring approximately 30 hours apart. Consequently,
the situation would be extremely dire if a major earthquake were to occur in either
the east or the west of the Nankai Trough. Therefore, in 2019 the Japan
Meteorological Agency established a system in which it would issue Nankai Troughearthquake emergency information (major earthquake warnings) and precautionary
warnings about subsequent earthquakes in anticipation of the occurrence of a major
earthquake in the area. In the worst-case scenario, that the first earthquake causes
significant damage, people around the world would be concerned and worried that the

Figure 6: Nationwide Probabilistic Seismic Hazard Map(From the Headquarters for Earthquake Research Promotion materials)
128°E 130°E 13
2°E 134°E 136°E 138°E 140°E 142°E 144°E 146°E
46°N

44°N

42°N

40°N

38°N

Probability
26% or moreHigh
6%-26%
3%-6%
Relatively high
0.1%-3%
Less than 0.1%

36°N

34°N

32°N

30°N

28°N

0%

0.1%

3%

6%
26%
100%
Probability(Meshes with zero probability based on model calculation conditions are displayed in white)

Probabilistic Seismic Hazard Map: Probability Distribution
Probability of ground motion with a seismic intensity of 6- lower or more over in the next 30 years(Average case and all earthquakes)

10

Source: The Headquarters for Earthquake Research Promotion, https://www.jishin.go.jp/evaluation/seismic_hazard_map/

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

occurrence of another earthquake resulting in similar damage could disrupt maritime
transportation, foreign exchange, and stock markets. Reducing damage caused by aninitial earthquake is therefore of the utmost importance.

5. Overcoming
Disasters with
Housing That
Remains Habitable

The administrative capabilities of the Japanese government will be inadequate,
and not able to handle a large-scale earthquake such as a Nankai Trough earthquake
or an earthquake directly beneath the Tokyo metropolitan area. All citizens have no
choice but to be prepared, to safeguard their own lives, and to help each otherovercome disasters. Making houses and buildings earthquake resistant is criticallyimportant to reducing damage from earthquakes. Japan needs to create housing thatpeople can continue to live in and buildings and factories that people can continue
to work in even after a major disaster.
The current seismic standards are based on Article 1 of the Building Standards
Act: “The purpose of this Act is to safeguard the life, health, and property of people
by providing minimum standards concerning the site, construction, equipment, anduse of buildings, and thereby to contribute to the furtherance of the public welfare.”Yet this is only a minimum standard. The standards aim to protect lives in the eventof a single earthquake only, but do not guarantee the continuation of lives orbusinesses in the event of a series of earthquakes. Further enhancing the earthquake
resistance of buildings is necessary.
Energy independence is also important when lifelines are disrupted. Many
power plants are located in high-risk coastal areas. Electricity frequencies differ
between eastern and western Japan, so flexibility of electrical power transmission
between the east and west is limited. Power cannot be generated unless industrial
water and fuel such as LNG arrive. Lifelines are interdependent, and if one stops,
they all stop. Individuals would do well to take measures such as preparing
renewable energy sources, storage batteries, and water wells.
The key points of the new National Spatial Planning Plan and Basic Plan for
National Resilience, which were approved by the Cabinet in July 2023, are tostrengthen infrastructure and lifelines, employ digital technology, encourage
collaboration between the public and private sectors, and strengthen and revitalize
local disaster prevention capabilities. Through these initiatives, the government aims
to create a vibrant, safe, and secure Japan. A line from Sun Tzu’s Art of War reads, “Ifyou know the enemy and know yourself, you need not fear the result of a hundred
battles.” If we know the strength of our enemy by using hazard maps, avoid danger,
and strengthen our homes, we can overcome disasters. If we know the strength ofthe enemy, we can find a way to deal with it. Today, over 100 years after the Great
Kanto Earthquake, we need to remember past disasters and create a safe country
that can sustain itself even in the event of a large-scale combination of disasters, aNankai Trough earthquake, an earthquake directly beneath the Tokyo metropolitanarea, and an eruption of Mt. Fuji.

112.
1. Introduction

2. Advancements
in Catastrophe
Modeling for
Japan

12

Comprehensive View of Risk for Japanfor Robust Risk Management
Kazuya Fujimura, Managing Director & Vice President,
Verisk Extreme Event Solutions

Ivelin Zvezdov, Assistant Vice President, Verisk Extreme Event Solutions
Jay Guin, Executive Vice President, Verisk Extreme Event Solutions

Japan is one of the world’s most active regions for severe natural hazard activity,
especially earthquakes and typhoons. The 2011 M9.0 Tohoku megathrustearthquake and resulting tsunami destroyed more than 120,000 buildings anddamaged nearly 1 million more, generating some of the largest losses ever seen in
the region. In 2018 and 2019, four powerful typhoons struck Japan, incurring total
insured losses of more than USD 30 billion from wind, precipitation-induced
flooding, and storm surge damage. As both the quantity and replacement value of
properties in Japan’s risk-prone areas continue to grow and peril frequency andseverity continue to increase, it is essential for companies operating in Japan toleverage tools that help them effectively manage and mitigate the financial risks
from future catastrophic events.

So, how does an organization effectively manage and mitigate the financial risks
from future catastrophic events, especially when historical loss information has
proven unreliable in assessing future loss potential? More than 30 years ago, Verisk
developed probabilistic models to help organizations prepare for the financial
impacts of catastrophes—before they occur. Since then, catastrophe models havebecome an important tool for the (re)insurance industry to manage risk, and thefield of catastrophe modeling has evolved through scientific advances, improved data
access, and technological optimizations.
The first catastrophe models for earthquakes in Japan, released more than 25
years ago, were only capable of modeling risks from ground shaking and fire
following an earthquake. The significant damage from liquefaction and tsunami
resulting from the Tohoku earthquake in 2011 prompted an urgent re-evaluation of
how existing earthquake models for Japan account for additional sub-perils, and thelatest model can model risks from liquefaction and tsunami. Figure 1 shows thecontributions of sub-perils to annual average insured loss (AAL) and Figure 2 shows
the contribution of sub-perils to the modeled insured losses for the simulated
Tohoku earthquake. Ground shaking is typically a significant driver of averageannual insured losses compared to the other sub-perils, and while losses attributed
to tsunami activity can be significant for shallow subduction zone earthquakes, asseen in Tohoku, the occurrence is less frequent. In managing earthquake risk, it isimportant to leverage a model, such as the updated Verisk Earthquake Model for
Japan, that considers that sub-peril contribution varies by event and that the model
used provides insights at the sub-peril level.
The first typhoon models for Japan had limited capability, only able to modelrisks from tropical cyclone wind. After decades of development, catastrophe models
can now model risks from tropical cyclone wind, storm surge, and precipitationinduced flooding to provide a comprehensive view of typhoon risk. Coupled withhigher resolution, the updated Verisk Typhoon Model for Japan considers the detailsof flood mitigation, including river and coastal levees, dams, and reservoirs, toevaluate risks from storm surge and flooding with high accuracy. These factors are

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

also accounted for in the Verisk Inland Flood Model for Japan. Figure 3 shows thecontributions of sub-perils to the annual average modeled insured loss for wind andflood. Figure 4 shows the contributions of sub-perils to insured loss for a simulationof Typhoon Hagibis. While tropical cyclone wind is the dominant sub-peril, storm
surge, and precipitation flooding make substantial contributions. Historically, there
were typhoon events in which storm surge and flooding made significant
contributions, such as Typhoon Vera (1959) and Typhoon Ida (1958). However, thelosses from storm surge and flooding would be much smaller if these events were tooccur today because of the advancement of flood and storm surge mitigation.

Figure 1: Contributions of Sub-Perils to Average
Annual Insured Loss for Earthquakes

Figure 2: Contributions of Sub-Perils to Insured Loss
for Simulated Tohoku Earthquake

EQ Shake (+LQ)

EQ Shake (+LQ)

EQ Tsunami

EQ Tsunami

EQ FireEQ FireFigure 3: Contributions of Sub-Perils to Average
Annual Insured Loss for Wind and Flood

Figure 4: Contributions of Sub-Perils to Insured Loss
for Simulated Typhoon Hagibis (2019)

TY Wind

TY Wind

TY Flood

TY Flood

TY Surge

TY Surge

Non-TY Flood

Non-TY Flood13

2. Comprehensive View of Risk for Japan for Robust Risk Management

With these advancements in catastrophe modeling for Japan, decision-making
for risk transfer, including insurance, can leverage a multi-peril view of risk. Figure 5
shows the contributions of sub-perils to the annual average insured losses–
approximately a 45% contribution due to earthquake, a 50% contribution due totyphoon and a 5% contribution due to non-typhoon flooding. Figure 6 shows thecomparison of exceedance probability (EP) values of modeled insured losses for each
peril and all perils combined. For shorter return periods, the contribution fromtyphoons is dominant, while the contribution from earthquakes becomes larger for
longer return periods. Leveraging multiple models can aid in risk management for
portfolios or (re)insurance programs covering multiple perils. These models can also
identify the protection gap between insurable and insured losses by peril. This
allows an organization to evaluate portfolio diversity while potentially increasing
affordability.

Figure 5: Contributions of Sub-Perils to Average Annual Insured LossTY Wind
TY Flood
TY Surge
Non-TY Flood
EQ Shake (+LQ)
EQ Tsunami
EQ FireFigure 6: Comparison of EP Values for Insured Losses by PerilTY Combined
Non-TY Flood
Modeled Insured Loss

EQ Combined
All Combined

5

10

20

50

Return Period (Years)

14

70

100

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

4. Typhoon Risk

Catastrophe modeling has improved with advanced science and engineering,and claims data from past events and is now a commonly used tool in the (re)insurance
industry. In recent years, catastrophe models have also been used to understand thechange in risk view based on the change of assumptions in the models. The
following sections will describe some sample applications for typhoons andearthquakes.

For typhoon risk, it is essential to understand how the risk might shift in a few
decades due to the impact of climate change. The industry has observed increased
frequency and intensity of typhoons, including an increase in intense precipitation, as
seen with Typhoon Hagibis. There has been observed incremental risk due to sea level
rise causing an increase in storm surge severity. While Verisk models account for nearpresent climate, catastrophe models can be climate-conditioned so that the event set in
the model reflects projected future climate states. With the application of a climateconditioned catalog, a probabilistic view of future risk can be provided to evaluate
how climate change impacts the risk view in the future. One recent study evaluatedthe impact of climate change on typhoon risk in Japan. The assumptions on climatechange are temperature increases of 1.8°C (case 1) and 3.3°C (case 2) relative topreindustrial times to the end of the scenario, which is assumed to be 2050. These
conditions represent the case where climate policies are introduced to achieve a net-zero
economy (case 1) and where no new climate policies are introduced beyond thosealready introduced (case 2). Based on the assumed temperature increases, the changes invarious parameters—annual frequency of typhoons, typhoon intensity, precipitation,and sea level rise—are assumed. The climate-conditioned catalogs were then createdby re-sampling events from the existing event catalog. Figure 7 shows the change inEP values relative to the current EP values for insured losses.

Figure 7: Change in EP Values for Insured Loss by Impact of Climate Change
30%
Change in Modeled Insured Loss

3. C
 hanging Landscapeof Risk

Case 1 - 2030
Case 1 - 2050
Case 2 - 2030

20%

Case 2 - 2050

10%

0%

AAL

50

100

Return Period (Years)15

2. Comprehensive View of Risk for Japan for Robust Risk Management

5. Earthquake Risk

The Tohoku earthquake was a wake-up call for action to improve the scientificunderstanding of the complex tectonics of the region. New research has emergedsince the event, both from local scientific organizations and the larger international
scientific community. However, there are high levels of epistemic uncertainty
around mechanisms of future earthquake ruptures in critical regions of Japan along
the Pacific coast—the Nankai Trough and the Sagami Trough. The time-dependent
models and their underlying assumptions significantly impact the view of risk
because these regions are close to population centers and may experience large
earthquakes, triggering all sub-perils. In modeling earthquake occurrence from the
Nankai Trough, Verisk considered the uncertainty in the parameters such as annual
occurrence rate, and is confident with the results from the standard Verisk model,
but Verisk understands that the uncertainties in the model parameters cause
uncertainties in the results. Using the Verisk Earthquake Model for Japan, thesensitivity of the results, depending on the assumptions of the frequency ofearthquakes in these critical regions, can be evaluated. For example, the change ofrisk metrics based on the assumptions for the occurrence rate for the earthquakes inand around the Nankai Trough with a magnitude greater than 7.0 are evaluated.
Figure 8 shows the change of EP values for insured loss based on the change ofearthquake occurrence rates in the Nankai Trough region. Similar analysis can be
conducted for other earthquake source zones.

Figure 8: Change in EP Values for Insured Loss by the Assumption
on Earthquake Occurrence Rate around the Nankai Trough2.0 times
1.5 times

Change in Modeled Insured Loss

40%

0.75 times
0.5 times

20%

0%

-20%

-4%

AAL

50
Return Period (Years)

16

100

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

6. M odeling ofMarket Complexity
and Uncertainty

One of the critical components of a CAT model is the financial module, which
computes insured loss from the ground up loss, considering all policy terms andconditions as well as all accountable uncertainties, dependencies, and correlations.
The financial model has advanced significantly to resolve market demand formodeling market complexity and uncertainties. Such complexity is found incommercial and excess lines, typically multi-layered with nested reinsurance placedon individual risks. In addition, multi-location policies, including risks spatiallyclose together, make the modeling of dependencies in loss accumulation of criticalimportance. Quantifying and propagating uncertainty through the modelingcomponents is a nontrivial endeavor. New algorithms for loss aggregation have been
implemented that explicitly capture peril-dependent spatial correlations and thecorrelation between coverages. (Figure 9)

Figure 9: Consideration of Stacked Multi-Layered Structure and Spatial Correlations among Locations
2.5%

Stacked multi-layered structure
XOL RE

Probability

2.0%

XOL RE

1.5%

+

1.0%

+

0.5%
0.0%

Loss

The resulting loss uncertainty distribution realistically reflects what we’ve
learned across many years of actual claims data, loss data, and observations following
catastrophic events. With the new financial model, every member of the risk value
chain can have confidence in the pricing and transfer of risk.
The importance of modeling losses from secondary perils, or sub-perils, isgrowing in the industry as insurance policy coverage for them is becoming morecomprehensive and more explicit. To accurately evaluate risks, it is necessary tomodel policy layers and sub-limits for each individually covered sub-peril and forthe combined peril loss of all risks in the contract. The financial model allows us toplace terms and conditions specifically by sub-peril, considering the propagation of
secondary uncertainty distribution of loss for each individual sub-peril. This
provides the flexibility to accurately reflect any combination of peril and contract
coverage; for example, sub-limits for storm surge or precipitation-induced flooding
in a policy that covers wind and water. (Figure 10)
Another key aspect is the proper treatment for the vertical tiering and nesting of
the insurance components of the commercial contract. In decision making for
insurance risk management and underwriting, it is necessary to group risks by class17

2. Comprehensive View of Risk for Japan for Robust Risk Management

and by geography and to sublimit them such that the modeling process and loss
outcomes meet both the underwriting requirements of the insurers as well as thedemands of the insured. The new financial model enhances flexibility andcapabilities to transform risk accumulations by geography, by insurance coverage, orby sub-peril, to realistically render the intricacies of large commercial and corporate
insurance contracts. (Figure 11)

Figure 10: S ub-Limits by Sub-Peril for Geographical and Risk Class
Accumulations

Wind Sub-Limit

Flood Sub-Limit

Figure 11: Support for Multiple Tiers of Sub-Limits for the Complex andStacked Structure

18

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

With this feature, the risks that reside within tiered sub-limits can be modeled,accounting for the loss aggregation process. One such example is risks that are
subject to a Yokohama earthquake sub-limit, as well as a Kanagawa-wide earthquake
sub-limit. With these enhanced capabilities, underwriters for large complex accounts
can offer terms that meet their clients’ needs while feeling confident that the risk is
priced adequately.
Whereas per occurrence reinsurance used to be the norm, over the last decade
there has been an increasing trend toward aggregate reinsurance programs. Aggregate
policies in their many forms are a traditional market instrument; they can cover
insurance losses from a single location as well as accumulated losses from groups ofmany locations in large commercial contracts. In both cases the aggregate limit
protects the insurer from the accumulation of claims and losses from multiple
catastrophe events in the contract year. By the same token, the aggregate deductible
protects the insured from the accumulation of retained losses in the case of multiple
events and claims in the same contracted year. The new financial model provides theability to structure policies with annual aggregate terms. (Figure 12)
Combined with expanded support for a wider range of reinsurance terms,
annual aggregate pre-risk terms and multi-layered structures provide the tools to
make more informed business decisions for pricing reinsurance. The transformationof insured gross loss as it passes through multiple tiers of reinsurance contracts is agood illustration of complexity in catastrophe modeling.

Figure 12: Support for Annual Aggregate Policy Terms

7. Closing Remarks

Catastrophe modeling has been crucial in the insurance year through its 30-year
history. Models for Japan have improved significantly with advances and canevaluate risks from all sub-perils—ground shaking, fire following earthquakes, andtsunamis for earthquake and tropical cyclone wind, storm surge, and precipitationinduced flooding for typhoons. In addition to the advancements to the peril model,
the financial model has become more sophisticated. The latest financial model canconsider the propagation of uncertainties in the risk aggregation process from eachrisk to layers and then contract with accuracy. With these advancements, (re)insurancecompanies can make better-informed decisions in line with their own risk tolerance
to address the protection gap that leaves communities with a heavy financial burdenin the aftermath of a catastrophe.

19

3.
1. Overview of
the Non-Life
Insurance Industry

20

Trends in Japan’s Non-Life
Insurance Industry
Non-Life Underwriting & Planning Department 1
Non-Life Underwriting & Planning Department 2
The Toa Reinsurance Company, Limited(1) Status of Non-Life Insurance Companies, Cooperatives and SASTI
As of November 1, 2023, a total of 55 general insurance companies wereoperating in Japan. A total of 33 companies were licensed as domestic insurers,
including foreign capital domestic insurers, while 22 companies were licensed as
foreign insurers.1
Japan began liberalizing its insurance industry with the financial big bang in
1996. Its non-life insurance companies have increased operating efficiency sincethen while conducting mergers and business integrations in stages. As a result, thenon-life insurance market has become an oligopoly comprising the three largest
non-life insurance groups (in alphabetical order: MS&AD Insurance Group
Holdings, Inc., Sompo Holdings, Inc. and Tokio Marine Holdings, Inc.). Based on
the statistics released by the General Insurance Association of Japan (GIAJ) and thefiscal 2023 financial results disclosed by these groups, we calculate that these threegroup companies account for more than 86% of net premium income written by
the 29 GIAJ members, totaling 9,132 billion yen.2,3,4,5
The market also includes cooperative and mutual insurance companies (referred
to as “Kyosai Organizations”), which offer fire, life, personal accident, automobile
and annuity products. Kyosai is a mutual aid system where the members share theirpremium to establish mutual assets, and the funds are paid out at times of
unexpected contingencies to compensate for the financial deficit and stabilize thelives of the members and their families. The main Kyosai Organizations that makeup the Japan Cooperative Insurance Association Incorporated had premium incomeof about 2.1 trillion yen in fiscal 2022 in total of fire, personal accident andautomobile kyosai products (excluding life and annuity kyosai products) according
to our calculation.6
In another development, the Small Amount and Short Term Insurance(“SASTI”) business was introduced in Japan following an amendment to theInsurance Business Act in April 2006. SASTI companies, which are limited toselling insurance products in small amounts with limited terms, provide non-life
and/or life insurance products. In fact, regulations make it much easier for SASTI
companies to enter the insurance business than is the case of establishing a new
insurance company. For example, SASTI companies need only to register and neednot be licensed by the Financial Services Agency to operate. The minimum capitalrequired is 10 million yen, compared to 1 billion yen for an insurance company, andthey may sell both life and non-life insurance products. The number of member
companies of The Small Amount and Short Term Insurance Association of Japan
continues to grow and the scale of the market continues to expand. Non-life
insurance products sold in this market are mainly renters insurance, including fire
insurance for the home contents of renters and rental housing liability insurance
sold through the real estate agent channel, recent strong-seller pet insurance, andpecuniary insurance. Some SASTI companies have grown to the extent that they
may choose to get a license to operate as an insurance company, while some existing
non-life insurance companies have newly established SASTI companies.

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

The Small Amount and Short Term Insurance Market Data
Figure 1: Member Companies

Figure 2: Premium Income(Total companies)(Total companies)
130
130

120

120

110

110
103

100

100

90

90

80

80

70

70
2019

(Billion (Billion
yen) yen)
150
150
120
115

110

120

122

122

115

110

103

2019 2020

2020 2021

2021 2022

2022 2023

2023

140

140

130

130

120

120

110

107.4 107.4
110

100

100

90

90

80

80

70

70
2019

143.5 143.5
134.6 134.6
127.7 127.7
117.8 117.8

2019 2020

2020 2021

2021 2022

2022 2023

2023

Source: The Small Amount and Short Term Insurance Association of Japan7(2) Trends in Business Results of Non-Life Insurance Companies for
Fiscal 20232
The following is a summary of the main financial results (total) of the 29 GIAJ
members in fiscal 2023.
Net premium income in all lines of business increased by 12 billion yen fromthe previous fiscal year to 9,132 billion yen, mainly due to automobile class withrevisions of insurance premium rates.
Net claims paid decreased by 53 billion yen to 5,330 billion yen because of
decreases in fire claims for natural disasters in spite of increases in automobile claims
as road traffic recovered. As a result, the loss ratio decreased by 0.6 percentage points
to 64.3%.
Expenses increased by 4 billion yen to 2,979 billion yen, while the net expense
ratio was unchanged at 32.6% owing to the increase in net premium income.
Underwriting profit increased by 63 billion yen to 177 billion yen.
Ordinary profit, calculated as the sum of underwriting profit and investment
profit, increased by 281 billion yen to 1,047 billion yen. After deducting tax
expense, net income also increased by 394 billion yen to 896 billion yen.

(3) O verseas Business Developments of the Three Largest NonLife Insurance Groups
The three largest non-life insurance groups have all positioned overseas businessas a growth driver, and have aggressively implemented initiatives such as forming
business alliances with foreign insurance companies and engaging in M&A.

21

3. Trends in Japan’s Non-Life Insurance Industry

Figure 3 shows overseas net premium income* for the three largest non-life
insurance groups which we calculate based on their released information. Their net
premium income from overseas business in fiscal 2023* was about 3 times that of
fiscal 2014, and overseas business accounted for approximately 35% of their net
premium income.
* In this section, “overseas net premium income” includes both non-life and life insurance premiums.

Figure 3: Trends in Overseas Net Premium Income for the Three Largest NonLife Insurance Groups3,4,5(Billion yen)
6,000

(%)
40

35
5,000
30
4,000
25

20

3,000

15
2,000
10
1,000
5

0

0
2014

2015

2016

2017

2018
2019
(Fiscal year)

2020

2021

2022

2023

Overseas net premium income (left scale)
Tokio Marine Holdings, Inc.
MS&AD Insurance Group Holdings, Inc.
Sompo Holdings, Inc.
Percentage of overseas net premium income (right scale) (Total of the three groups including life insurance)

The three groups’ global business developments and/or restructuring in the
non-life insurance segment in recent years are as follows:
Mitsui Sumitomo Insurance Company, Limited, a subsidiary of MS&AD
Insurance Group Holdings, Inc., acquired Transverse Insurance Group, LLC in
2023 seeking to expand its business in the U.S. In addition, they announced in
2023 that its subsidiary MSIG Insurance (Lao) Co., Ltd. and Sokxay Insurance Sole
Company Limited (“SIC”), a subsidiary non-life insurance company of Sokxay
Group, were merged to establish MSIG Sokxay Insurance Co., Ltd.8,9
Sompo Holdings, Inc. announced in 2021 that its wholly owned subsidiary
Sompo International Holdings Ltd. would acquire Italian crop insurance company
ARA 1857 S.p.A. In addition, they announced in 2023 that Sompo Seguros S.A., itsBrazilian subsidiary, completed the transfer of all assets and liabilities related to the22The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

consumer business to Sompo Consumer Seguradora S.A., a new insurance subsidiaryof Sompo Seguros.10,11
In 2021, Tokio Marine Holdings, Inc.’s subsidiary in Brazil, Tokio Marine
Seguradora S.A. and Caixa Seguridade Participações S.A., an insurance holding
subsidiary of Caixa Econômica Federal, a Brazilian state-owned bank, established ajoint venture to underwrite mortgage and homeowners insurance. In addition,
Tokio Marine Holdings, Inc. announced in 2024 that it had completed the sale of
Tokio Marine Pacific Insurance Limited, its subsidiary in Guam, the U.S. and thesale of all of its shares in Arabian Shield Cooperative Insurance Company, a life andnon-life insurance company in Saudi Arabia.12,13,14
With a focus on life and non-life insurance, on the other hand, the three groups
are expanding and strengthening an array of various areas based on synergies withinsurance products and promotion of insurtech, including financial services, risk
solutions and services, nursing and senior care, healthcare, and digital. They areenhancing alliances and investments in a variety of overseas companies including
artificial intelligence startups and insurtech companies.

(4) Claim Payment for Natural Disasters
Japan is exposed to natural disasters such as typhoons and earthquakes, and invarious ways non-life insurance products and their related services support those
who suffer losses from natural disasters.
Largest Claims Paid for Typhoons and Windstorms in Japan(Updated March 2022 by GIAJ)15
Name of Disaster

Date

Total amount ofclaim payments(in billions of yen)1

Typhoon No. 21 (Typhoon Jebi)

Sep. 3-5, 2018

1,067.8

2

Typhoon No. 19 (Typhoon Hagibis)

Oct. 6-13, 2019

582.6

3

Typhoon No. 19 (Typhoon Mireille)

Sep. 26-28, 1991

568.0

4

Typhoon No. 15 (Typhoon Faxai)

Sep. 5-10, 2019

465.6

5

Typhoon No. 18 (Typhoon Songda)

Sep. 4-8, 2004

387.4

GIAJ released the figures for claims paid on dwelling risks for the 2024 Noto
Peninsula Earthquake (occurred on January 1, 2024) in total of 91.0 billion yen asof May 31, 2024, which ranks as the 6th largest among claims related to domestic
earthquakes in history.16

23

3. Trends in Japan’s Non-Life Insurance Industry

Largest Claims Paid for Earthquake Insurance on Dwelling Risks(As of March 31 2023)17

2. Topics of the
Non-Life
Insurance Market

Earthquake (Region Name)

Date ofOccurrence

Total amount ofclaim payments(in billions of yen)1

The 2011 off the Pacific coast of
TohokuMar. 11, 2011

1,289.4

2

The 2016 Kumamoto

Apr. 14, 2016

390.9

3

Fukushima-ken-oki

Mar. 16, 2022

265.4

4

Fukushima-ken-oki

Feb. 13, 2021

250.9

5

The 2018 Northern Osaka

Jun. 18, 2018

124.8

(1) Trends in the Fire Insurance Market
Due to the fact that fire insurance business results in Japan have deteriorated bymajor natural disasters and so on, the Reference Loss Cost Rates (advisory purepremium rates) for fire insurance, as calculated by General Insurance Rating
Organization of Japan (GIROJ), has been raised four times since 2018. Non-life
primary insurance companies have revised their premium rates in response to theReference Loss Cost Rates revisions, and have also consistently phased in tighter
terms and conditions (besides those related to premium rates) such as shortening the
maximum policy period for fire insurance to five years from ten years, increasing
deductibles, and setting limits of liability, in order to improve fire insurance results.
** Under the Act on Non-Life Insurance Rating Organizations, GIROJ calculates Reference Loss
Cost Rates (for voluntary automobile insurance, fire insurance, personal accident insurance,and so on), which are pure premium rates, and Standard Full Rates (for compulsory automobile
liability insurance and earthquake insurance), which consist of pure premium rates and expense
loading, based on insurance statistics from the data reported by its member insurancecompanies. GIROJ provides them to its member insurance companies as advisory rates.18

24

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

Outline of Announcements by GIROJ

July 201819

Reference Loss Cost Rates for Homeowners’ Comprehensive
Insurance increase by 5.5% on average.
Background of revision: Increase in claims related to natural
disasters and water damage from plumbing

December 201920

Reference Loss Cost Rates of Homeowners’ Comprehensive
Insurance increase by an average of 4.9% with discounts for
relatively new dwellings.
Background of revision: Increase in claims related to natural
disasters and reflection of risk differentials by building age

July 2021

21

September 202322

Reference Loss Cost Rates of Homeowners’ Comprehensive
Insurance increase by an average of 10.9 %.
Key background factors for revision: Increase in natural hazard
risk and reflection of risk trend

Reference Loss Cost Rates for Homeowners’ Comprehensive
Insurance are to increase by an average of 13.0 % withsegmentalization of Premium Rates for water disasters into fivecategories according to the regional risks.
Key background factors for revision:• Increase in the amount of claims by natural disasters andsignificant change of the risk environment• To ensure the fairness among policyholders in terms of theburden of water disaster premium rates*** In case where each insurance company chooses to reflect the revision of the Reference Loss
Cost Rates in their fire insurance products, it may take 1 year or more from the date of the
GIROJ announcement.

(2) Reinsurance Renewals in 2024
Most reinsurance contracts of domestic non-life insurance companies, including
cooperatives and SASTI companies, are renewed at the start of their fiscal year,
generally April 1.
Having turned from the hardening trend of recent years, the April Reinsurance
renewals for 2024 in Japan were orderly and in general proceeded with stable terms
and conditions. This is because increases in premium rates and tightening ofreinsurance conditions had been effected in previous years. Additionally, theimprovement in the supply-demand balance of reinsurance capacity, influenced by
the recovery of reinsurers’ capital strength due to improved business performance,and by the depreciation of the Japanese yen, as well as limited insurance losses in2023 from natural disasters such as typhoons, also affected the renewal negotiations.
25

3. Trends in Japan’s Non-Life Insurance Industry

As a whole, the range of premium rates was close to flat or even slightly lower
for some lines of business. In specific business lines such as liability, further
improvements in the terms and conditions were requested owing to reinsurers’
concerns about U.S. exposure.

(3) Acceleration of Digital Transformation
Major insurers and others have rapidly accelerated digital transformation using
various digital technologies premised on ‘zero contact.’ The following are examples:•	
The introduction of various mechanisms and tools that enable remote andpaperless customer interactions including insurance consultations, contract
application and loss reporting, along with insurance premium and claims
settlement.
•	T he application of AI techniques for customer communications, risk
assessment, claim surveying, disaster prediction and mitigation, as well as forvarious new products and services.

(4) Trends in Regulation by Regulatory Agencies
Over the several years, the Japanese Financial Services Agency (JFSA) has been
identifying the financial, economic, and global situations and has also been
conducting in-depth monitoring of financial institutions through data analysis anddialogue with them in order for financial institutions to perform their financial
intermediary functions sufficiently while maintaining their soundness even as theenvironment surrounding them is changing.
As for insurance companies, the JFSA has stated that if policyholder protection
has been found to be deficient, they would take strict actions based on laws andregulations, and it would also develop and implement effective measures to preventthe recurrence of similar cases of misconduct.
Because of the increase in insurance money payments amid the increasing
frequency and severity of natural disasters in recent years, property insurance
premium rates have followed an uptrend. In this situation, in order to ensure that
non-life insurance companies more appropriately exercise the function of guarding
against natural disasters, the JFSA encourages non-life insurance companies todevelop more advanced enterprise risk management (ERM), review and revise theinsurance coverage and premium rates in consideration of customers’ needs and therisk situation, and provide services useful for disaster risk reduction.23
The JFSA has been conducting studies to introduce the new economic valuebased solvency regulation in FY2025, in parallel with the introduction of the
Insurance Capital Standard (ICS) by the International Association of Insurance
Supervisors (IAIS). In preparation for the introduction of an economic value-based
solvency regulation, the JFSA published “Direction of remaining issues on economic
value-based solvency regulation” in May 2024.24

26

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

The JFSA has noted that introducing the economic value-based solvency ratio
into the regulatory regime may bring unexpected consequences, such as excessively
risk-averse behavior among insurance companies. Therefore, it is investigating
unintended consequences and international trends while continuing its examinationand preparation with emphasis on dialogue with relevant parties for a smoothtransition to the new regime.

(5) ESG and SDGs Initiatives
Japan is among the countries promoting ESG and SDGs. Led by major
insurers, various companies are proceeding with implementation of a broad array ofstudies and initiatives in areas including asset management, personnel systems,
corporate governance, compliance and social contribution, in addition to improving
insurance products and services.
The three largest non-life insurance groups have established sustainability
committees, and have officially incorporated the ESG framework into the decisionmaking process for insurance operations and investment. They regularly publish thesustainability reports. In addition, they are addressing the greater frequency andintensity of natural disasters as a result of climate change by cooperating moreclosely with other industries, local governments and other organizations in disastermitigation initiatives ranging from disaster prevention to repair cost reduction. The
three groups are also enhancing insurance products that facilitate and support
renewable energy development.

27

3. Trends in Japan’s Non-Life Insurance Industry

References
1.	General Insurance Association of Japan, “Fact Book 2022-2023 General
Insurance in Japan”
	https://www.sonpo.or.jp/en/publication/ue089i00000000sa-att/fb2023e.pdf
2.	General Insurance Association of Japan website, “Overview of Fiscal 2023
Financial Results for the Member Companies”(Japanese)	https://www.sonpo.or.jp/member/gaikyou/kessan/g34l0i0000000j0r-att/
R603_01.pdf
3.	MS&AD Insurance Group Holdings, Inc., “Explanatory Material for BusinessResults for the Year Ended March 31, 2024”	https://www.ms-ad-hd.com/en/news/irnews/auto_20240520501558/pdfFile.pdf
4.	Sompo Holdings, Inc., “Summary of Consolidated Financial Results for the
fiscal year ended March 31, 2024 Supplementary Information”
	https://www.sompo-hd.com/-/media/hd/en/files/doc/pdf/e_
news2024/e_20240520_2.pdf?la=en
5.	Tokio Marine Holdings, Inc., “Information of major subsidiaries’ businessresults for the fiscal year ended March 31, 2024”	https://www.tokiomarinehd.com/en/ir/event/
presentation/2023/qsbph40000002ear-att/
4Q_FY2023_Information_about_major_subsidiaries_business_results_e.pdf
6.	Japan Cooperative Insurance Association Incorporated, “Kyosai in Japan – Fact
Book 2023”
	https://www.jcia.or.jp/publication/pdf/%E3%83%95%E3%82%A1%E3%82%
AF%E3%83%88%E3%83%96%E3%83%83%E3%82%AF2023%E8%8B%B
1%E8%AA%9E%E7%89%88.pdf
7.	The Small Amount & Short Term Insurance Association of Japan, “Overview of
Fiscal 2023 Financial Results for the Small Amount and Short Term Insurance
Industry” (Japanese)	https://www.shougakutanki.jp/general/info/2024/news20240704.pdf
8.	Mitsui Sumitomo Insurance Company, Limited, “Notice Regarding
Completion of Transverse Insurance Group Acquisition”
	https://www.ms-ins.com/english/news/FY2022/pdf/0104_1.pdf
9.	Mitsui Sumitomo Insurance Company, Limited, “Changes in business
operation in Lao People’s Democratic Republic”
	https://www.ms-ins.com/english/news/FY2023/pdf/0616_1.pdf
10.	Sompo Holdings, Inc., “Sompo International to Acquire Crop Insurance
Company in Italy”	https://www.sompo-hd.com/-/media/hd/en/files/news/2021/e_20210921_2.
pdf?la=ja-JP
11.	Sompo Holdings, Inc., “(Additional Disclosure) Closing of the Sale of theConsumer Business of Sompo Seguros S.A.”	https://www.sompo-hd.com/-/media/hd/en/files/news/2023/e_20230825_1.
pdf?la=ja-JP

28

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

12.	Tokio Marine Holdings, Inc., “Progress Regarding Establishment of Insurance
Joint Venture in Brazil”
	https://www.tokiomarinehd.com/en/newsroom/release/k82ffv0000009663att/20210105_e.pdf
13.	Tokio Marine Holdings, Inc., “Completion of the Sale of Tokio Marine PacificInsurance”
	https://www.tokiomarinehd.com/en/newsroom/release/2023/
k82ffv000000h2jh-att/20240104_TMPI_e.pdf
14.	Tokio Marine Holdings, Inc., “Completion of the Sale of Stake in Arabian
Shield Cooperative Insurance Company”
	https://www.tokiomarinehd.com/en/newsroom/release/2023/
k82ffv000000he7t-att/20240206_Arabian_Shield_e.pdf
15.	General Insurance Association of Japan, “Claims Payment for Natural Disasters”
	https://www.sonpo.or.jp/en/statistics/ue089i0000000f17-att/ten_largest_
claims_paid_for_typhoons_and_windstorms_20220525.pdf
16.	General Insurance Association of Japan, “Key figures related to the insurance
claims paid for the 2024 Noto Peninsula Earthquake (As of April 26, 2024)”	https://www.sonpo.or.jp/en/news/2024/h2p8pq0000000276-att/240523_01.pdf
17.	The Japan Earthquake Reinsurance Co., Ltd., “2023 Annual Report”
	https://www.nihonjishin.co.jp/pdf/disclosure/english/2023/en_06.pdf
18.	The General Insurance Rating Organization of Japan, “Main Operations”	https://www.giroj.or.jp/english/main_2.html
19.	The General Insurance Rating Organization of Japan, “Announcement on
Revision of Reference Loss Cost Rates for Fire Insurance”
	https://www.giroj.or.jp/english/press_2018/20180718f.pdf
20.	The General Insurance Rating Organization of Japan, “Announcement on
Revision of Reference Loss Cost Rates for Fire Insurance”
	https://www.giroj.or.jp/english/press_2019/20191203.pdf
21.	The General Insurance Rating Organization of Japan, “Announcement on
Revision of Reference Loss Cost Rates of Fire Insurance”
	https://www.giroj.or.jp/english/press_2021/20210730.pdf
22.	The General Insurance Rating Organization of Japan, “Announcement on
Revision of Reference Loss Cost Rates for Fire Insurance”
	https://www.giroj.or.jp/english/press_2023/20230915_1.pdf
23.	The Financial Services Agency, “The JFSA Strategic Priorities July 2023 - June 2024”	https://www.fsa.go.jp/en/news/2023/the_jfsa_strategic_priorities_july2023june2024.pdf
24.	The Financial Services Agency, “Direction of remaining issues on economic
value-based solvency regulation” (Japanese)	https://www.fsa.go.jp/policy/economic_value-based_solvency/07_1.pdf

29

4.
1. Overview ofBusiness Resultsfor Fiscal 2023

Trends in Japan’s Life Insurance Industry
Life Planning Department
The Toa Reinsurance Company, Limited

During the fiscal year ended March 31, 2024 (fiscal 2023), premium income
and other revenues of Japan’s 42 life insurance companies increased by 13.0% year
on year to 43.0 trillion yen, due largely to an increase in sales of yen-denominatedsingle-payment products as interest rates in Japan entered a rising phase.
Due to a decrease in hospitalization benefit payments and other payments related
to the COVID-19 pandemic, which had a significant impact on performance in theprevious fiscal year, ordinary profits increased 26.6% year on year to 3.2 trillion yen,
and basic profits,* which represent profits from core businesses, increased 41.5%
year on year to 3.9 trillion yen.
Business performance has improved because of a number of factors including
reduced hospitalization benefit payments related to COVID-19 and rising interest
rates in Japan. Life insurance companies are demonstrating a clear commitment toreturning the increased profits to policyholders, with some companies announcing
increases in policyholder dividends and dividends to shareholders.
* Basic profits are calculated by deducting capital gain/loss and extraordinary gain/loss from ordinary profits.

2. Impact of
COVID-19 andRelevant Initiativesof Life Insurance
Companies

The COVID-19 pandemic began wreaking havoc in 2020. While the numberof infected people has declined and the situation has basically returned to normal,
COVID-19 has had a significant impact on society and the economy. This
unprecedented pandemic affected Japan’s life insurance industry in various ways.
The life insurance industry responded to societal needs by extending the grace
period for premium payments, reducing interest on new loans to policyholders, andexpanding the scope of payments related to COVID-19. Specifically, insurancecompanies applied special measures so that “accidental death benefits” and “deemedhospitalization benefits*” that had been ineligible for benefit payments under the policy
clause became eligible for payment. As a result, benefit payments related to COVID-19
totaled approximately 1,314.4 billion yen as of September 30, 2023. Benefit payments
Benefit Payments Related to COVID-19*
Death benefits

Hospitalization benefits
Of which,
deemedhospitalization
benefits

Of which,accidental
death benefits
Total
number ofcases

61,848 cases

31,082 cases

Approx.
11.30
million cases

Approx.
10.88
million cases

Approx.
11.36
million cases

Totalamountpaid

Approx.
306.7
billion yen

Approx.
69.6
billion yen

Approx.
1,007.7
billion yen

Approx.
959.8
billion yen

Approx.
1,314.4
billion yen* As of September 30, 2023

30

Total

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

resulting from special measures amounted to approximately 1,029.4 billion yen,accounting for nearly 80% of the total benefit payments related to COVID-19. Thislarge total was unprecedented given that benefit payments by the life insurance
industry associated with the Great East Japan Earthquake totaled approximately 159.9
billion yen. Of note, “deemed hospitalization” and the various other special measuresthat were introduced in response to COVID-19 ended on May 8, 2023.
These rapid and flexible initiatives by the life insurance industry showed that
insurance companies have been fulfilling their expected societal role of contributing
to social stability.
On the other hand, COVID-19 has highlighted the challenges facing the life
insurance industry. Although life insurance sales channels in Japan have become
more diverse, face-to-face sales by sales representatives remain the largest channel. As
a result, sales of new policies decreased significantly at the beginning of thepandemic because life insurance companies were forced to restrict face-to-face sales
in order to prevent the spread of infection. The slow pace of digitalization, which
has been an issue for Japanese society as a whole, also affected the life insurance
industry during the COVID-19 pandemic.
In addition, customers expressed dissatisfaction with the confusion that arosewhen some new products developed in response to the COVID-19 pandemic werequickly discontinued because the sharp increase in “deemed hospitalization benefits”
had a significant negative impact on business performance. Other commentarysuggested that products designed to pay benefits to people after contracting
COVID-19 may in fact have contributed to the spread of the disease (as people may
have been complacent knowing that they could receive insurance benefits), which
resulted in the strain on hospitals.
The COVID-19 pandemic was an unprecedented event, and the insurance
industry must use the lessons learned from this experience to prepare for future
disturbances that may occur if an unforeseen event like the COVID-19 outbreakoccurs again.
* Hospitalization benefit paid to COVID-19-positive people who received certification for self-care at home or at a
hotel instead of at a hospital, based on a doctor’s diagnosis. This measure was implemented in response to a shortageof hospital beds due to an increase in the number of people infected with COVID-19.

3. Increased Activity
in the Group
Credit Life
Insurance Market

Competition is intensifying among insurance companies involved in groupcredit life insurance in Japan. Group credit life insurance reduces the balance of aloan to zero if the policyholder dies or becomes severely disabled while repaying theloan. In Japan, people taking on large loans for purchases such as housing are often
required to take out group credit life insurance. Intensifying competition is backed
by more aggressive initiatives among both banks that sell group credit life insurance
and insurance companies that underwrite group credit insurance. Banks areenhancing initiatives to differentiate the features of group credit life insurance, as
their ability to compete by reducing mortgage interest rates has reached its limit.
Meanwhile, insurance companies, especially life insurance companies just entering

31

4. Trends in Japan's Life Insurance Industry

the market, are enhancing initiatives to position group credit life insurance as a
product that will generate stable earnings over the medium-to-long term.
Banks often require group credit life insurance when structuring loans, so sales
at bank counters are a primary channel for acquiring customers. Insurancecompanies have conventionally strengthened their relationships with banks in ways
such as collaborating with banks within their corporate groups and attracting local
banks by offering sales incentives. Now, insurance companies are promoting more
flexible insurance policies, raising upper limits on the amount of assurance that an
applicant can apply for with declaration (non-medical), and providing additional
services to further strengthen their relationships with banks and to address banks’need to differentiate themselves through group credit life insurance.
In offering more flexible insurance policies, including raising upper limits on
application without medical examinations, insurance companies are underwriting
customers with products that are better suited to their lifestyles, including products
featuring broad coverage for customers not eligible for group credit life insurance
through normal declaration procedures due to their health condition, as well as joint
group credit life insurance policies for couples that exempt one partner from loan
repayments if the other partner dies or becomes severely disabled. Another reason
that companies are raising upper limits on application without medical
examinations is to address the pronounced increase in housing prices.
Specific examples of additional services include a supplementary living benefit
that guarantees a portion of the loan balance if the policyholder contracts cancer oranother major illness, but does not incur additional interest or, from thepolicyholder’s perspective, additional premiums. Extending repayment periods is
another option that is attractive to young customers because longer repayment
periods reduce premium installment payments with guaranteed repayment periodsof up to 50 years. Additional services that go beyond insurance policies themselves
are also now being offered. Examples include the creation of specialized agencies
staffed by mortgage loan experts who provide financial planning and consulting
services, health consultation services over the phone available 24 hours a day, andservices that provide second opinions through interviews with general practitioners.
Targeting group credit life insurance portfolio growth, insurance companies are
increasing products and services based on bank and market needs to enhance theirrelationships with banks. Competition among insurers is therefore expected tocontinue in the future.

32

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

4. Life Insurance
Product Trends
in a Higher
Interest Rate
Environment

The Bank of Japan (BOJ; Japan’s central bank) controls yields mainly throughlarge-scale Japanese government bond purchases. In December 2022, the BOJ raised
the long-term yield cap from the previous 0.25% to 0.50% with the goal of
improving market functions, and in October 2023 set the upper limit for yield
curve control at 1.0%. In addition, in March 2024 the BOJ lifted its long-term
negative interest rate policy and ended yield curve control, which had been designed
to keep long-term interest rates low. These policy reviews by the BOJ are affecting
life insurance companies.
Sales of single-premium products denominated in foreign currencies (regardlessof the currency in which payments are made) have been increasing since around2022 in response to rising interest rates overseas. In 2023, however, sales of yendenominated single-premium savings insurance increased as Japanese interest rates
also began to rise. From April to December 2023, sales of these insurance products
among nine life insurance companies in Japan that handle such products doubled
compared to the same period a year earlier to approximately 2.92 trillion yen.
Amid strong sales of savings products, life insurance companies have raised theirassumed interest rates in succession. Sumitomo Life raised its assumed interest rate
for savings insurance from 0.9% to 1.0% in November 2023. Nippon Life thenraised its assumed interest rate for single-premium whole life insurance from 0.6%
to 1.0% in January 2024, and Meiji Yasuda Life raised its assumed interest rate forsingle-premium whole life insurance from 0.94% to 1.10% in May 2024. Raising
assumed interest rates will reduce the insurance premiums paid by policyholders andtherefore are projected to support increased product sales. At the same time,
however, raising assumed interest rates is also expected to intensify savings productsales competition among insurance companies.
Sales of savings products have been brisk, but sales of protection products such as
life and health insurance have been slower. Selling protection products requires careful
explanation of future risks to stimulate need of customers. However, COVID-19
limited face-to-face sales and the opportunities to provide such explanations, which
was a factor slowing sales. In addition, protection products are effective for preparing
for risks, but are less appealing as investments. Market interest rates have risen and theintroduction and expansion of the Nippon Individual Savings Account (NISA)
program for tax-exempt small investments by individuals has led to greater interest in
asset management among individuals. Thus, the fading appeal of protection products
is another factor contributing to weaker sales.
Protection products are more profitable than savings products and will be an
important source of future profitability for life insurance companies. However, thebusiness environment is expected to remain challenging for sales of protection
products because the Nikkei average has risen to its highest levels since the late1980s and early 1990s, and interest in asset management is expected to growfurther, including the transfer of assets overseas due to the ongoing weakness of theyen. Life insurance company initiatives to stimulate demand for protection
insurance under these circumstances are therefore of interest.

33

4. Trends in Japan's Life Insurance Industry

5. Life Insurance
Company
Objectives inEntering NonInsurance Markets

34

Japan’s insurance market is expected to shrink due to a declining population, so
life insurance companies are accelerating their expansion into non-insurance
markets.
In November 2023, Nippon Life acquired Nichii Holdings, which owns Nichii
Gakkan, the largest nursing care company in Japan. In March 2024, Dai-ichi Lifeannounced that it would acquire Benefit One, a comprehensive employee benefit
service company that provides corporate employee benefit services, health support,
and education and training support, through a tender offer.
The accelerating decline in the birthrate and the aging population in Japan,
along with the expected contraction of the insurance market in the future, areencouraging insurance companies to enter non-insurance markets to secure newsources of revenue outside of their core insurance business. Also, it seems that
another objective is to strengthen sales of insurance products by leveraging theservices offered by companies in non-insurance markets.
Nippon Life will be able to leverage Nichii’s nursing care business services toprovide added value to its policyholders in ways such as introducing nursing careservices and care managers. Nippon Life therefore expects to strengthen its
insurance sales with its expanded service offerings. Meanwhile, Dai-ichi Life has
been providing a benefits package to its corporate customers, which includes
offering services to the corporate customers’ employees through a health app as acomponent of customer service, and aims to promote insurance sales by expanding
its service offerings using the know-how that Benefit One has cultivated.
In Japan, environmental changes such as aging and population decline areaccompanied by the growing diversity of customer needs, which presents challenges
for addressing customer risks and needs with traditional insurance products andservices alone. Given the increasing importance of providing value and service inmore ways to meet customer needs, the acquisitions by Nippon Life and Dai-ichi
Life will be a test of whether this trend will accelerate. The post-acquisition
initiatives of both companies will therefore be a focus of attention.

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

Company Overview
ProfileThe Toa Reinsurance Company, Limited (Toa Re), was established in 1940.
With the reinsurance market evolving and clients’ needs expanding, we haverecognized the importance of being able to provide a diverse line of life and non-lifereinsurance products to lead the market as Japan’s primary professional reinsurer.
Toa Re is based in Tokyo with subsidiaries in New Jersey (U.S.A.) and Zürich
(Switzerland). Increasing demand for reinsurance products in Asian countries
prompted us to expand our operations in those regions and establish branch offices
in Singapore, Kuala Lumpur and Hong Kong.
In acknowledgment of Toa Re’s outstanding financial profile, credit rating
agencies, Standard & Poor’s Financial Services LLC, A.M. Best Company, Inc. andJapan Credit Rating Agency, Ltd., have assigned Toa Re ratings of A, A and AA+,
respectively. As of March 31, 2024, the Toa Re Group boasted total assets of 1,021.4
billion yen. Net premiums written during the fiscal year ended March 31, 2024,
totaled 280.8 billion yen.

Mission Statement

ToaRe Mission Statement
Providing Peace of Mind
Toa Re aims to realize its mission byworking with society and applying the principles of fairness
and integrity to all aspects of our business
offering long-term, solid support to our clients by supplying
reinsurance products and services that enable themto maintain stable operations
striving to enhance our corporate value for the interests ofour shareholders through open
and transparent corporate management
respecting the creativity of our group employees
and valuing their contributions
conserving the environment and contributing toa sustainable society

35Company Overview

Consolidated
Financial Highlights

Thousand
U.S. dollars

Million yen
2024

2023

Ordinary income¥329,071¥349,337

Net premiums written

280,826

Ordinary profit (loss)

2022

2021

2020

2024

¥329,804 ¥312,101¥297,757$2,173,376

320,822302,024

287,547

270,252

1,854,738

21,197

3,238

827

2,164

88

139,997

15,5562,450(1,248)2,745(2,141)

102,740

289,658

196,303

201,307

182,257

167,141

1,913,070

1,021,441

905,749

860,421772,108

711,6906,746,192

For the year ended March 31

	Net income (loss) attributableto owners of the parent
As of March 31
Total net assets
Total assets(Rate: ¥151.41 = US$1)

Net Premiums
Written by Class(Consolidated Basis)(Million yen)

Others¥31,799
9.91%
Pet¥9,2332.88%

Fire¥85,00926.50%

Fiscal 2022
Total

Life
¥97,71330.46%¥320,822

Marine¥12,808
3.99%

Motor
¥29,042
9.05%

Liability¥55,21417.21%(Million yen)

Others¥28,584
10.17%
Pet¥7,6052.71%

Fire¥65,075
23.17%

Fiscal 2023
Total

Life
¥94,24233.56%
Liability¥41,782
14.88%

36¥280,826

Marine¥11,057
3.94%

Motor
¥32,478
11.57%

The Toa Reinsurance Company, Limited — Japan’s Insurance Market 2024

The Toa 21st Century
Reinsurance Co. Ltd.
(Toa Re Europe)

Overseas Network

Toa Re America(Toronto Branch)

Toa Re (Head Office)TaiwanHong Kong
Singapore
Kuala Lumpur
Toa Re America(Agricultural Office)Locations

U.S.A.
The Toa Reinsurance Co.
of America (Toa Re America)

Branches
Singapore

50 Raffles Place #26-01, Singapore Land Tower, Singapore 048623
Telephone: +65-6220-0123

Kuala Lumpur

28th Floor, UBN Tower, 10 Jalan P. Ramlee, 50250 Kuala Lumpur, Malaysia
Telephone: +60-3-2732-5911

Hong Kong

Room 801, 8th Floor, Tower 1, Admiralty Centre, 18 Harcourt Road, Hong Kong
Telephone: +852-2865-7581

Subsidiaries

U.S.A.

The Toa Reinsurance Co. of America
177 Madison Avenue, P.O. Box 1930, Morristown, NJ 07962-1930, U.S.A.
Telephone: +1-973-898-9480
The Toa Reinsurance Co. of America (Agricultural Office)18301 Von Karman Avenue, Suite 400, Irvine, CA 92612, U.S.A.
Telephone: +1-949-474-1420

CanadaThe Toa Reinsurance Co. of America (Toronto branch)
55 University Avenue, P.O. Box 53, Suite 1700, Toronto, Ontario, M5J 2H7, Canada
Telephone: +1-416-366-5888

Switzerland

The Toa 21st Century Reinsurance Co. Ltd. (Toa Re Europe)
Kreuzplatz 16, 8008 Zürich, Zürich, Schweiz

Representative Offices
U.S.A.

177 Madison Avenue, P.O. Box 1930, Morristown, NJ 07962-1930, U.S.A.
Telephone: +1-973-898-9816

Taiwan4F-2, No. 128, Section 3, Min Sheng East Road, Taipei 10596, Taiwan, R.O.C.
Telephone: +886-2-2715-1015

37

The Toa Reinsurance Company, Limited
6, Kanda-Surugadai 3-chome, Chiyoda-ku, Tokyo 101-8703, Japanh t t p s : / / ww w.t oare.co.jp / english /Providing
Peace of Mind
The Toa Re Group is a global composite reinsurer that provides

peace of mind to its clients by protecting them from a broad rangeof perils such as catastrophic earthquakes and typhoons, casualty

events, crop damage, mortality and health care.

We at the Toa Re Group aim to be chosen by clients from acrossthe world because of our ability to offer a secure long-term

partnership of optimal solutions and strong financial security.

www.toare.co.jp