ING opened its doors in Tokyo on June 30. Others active in the Japanese reinsurance market include RGA, Swiss Re, Munich Re, Toa Re, Cologne Life Re and Hannover Re. Re was created in a joint venture with Kyoei Life Insurance Co. in January. A New Tool Though reinsurance as a tool for capital and financial management is a fairly new concept within the Japanese life insurance industry, the use of life reinsurance has been growing. The increase is due to the use of financial reinsurance for acquisitions and to boost solvency margin ratios, said Hitoshi Morita of Swiss Re, Tokyo.
Conditions are ripe for the use of life reinsurance in Japan to grow further.
The conditions in Japan that precluded broad value from reinsurance in the past are crumbling. In 1996, deregulation opened up the insurance market and encouraged competition. Deregulation allowed nonlife companies to enter the life business and vice versa. In the past, Japan s Ministry of Finance mandated tariff rates, which eliminated competition on pricing. The Japanese regulators stifled competition in other ways, limiting financial or capacity incentives for reinsurance.