As Japan’s insurance market has shown limited growth potential due to a shrinking and aging population, domestic companies have increasingly looked to expand overseas, as discussed in a new AM Best commentary.

In its new Best’s Commentary, titled, “Japan Insurers See Growth Through Reinsurance, Acquisitions,” AM Best states that Japan’s insurers are taking advantage of growth opportunities in international markets, particularly in the United States, Australia and other developed economies to maintain long-term growth and diversify revenue streams.

“U.S. insurers owned by Japanese companies have seen growth in direct premiums written the last four years, exceeding $68 billion in 2024,” said Charles Chiang, senior financial analyst, AM Best. “This trend is likely to continue in light of recent deals such as Meiji Yasuda Life’s acquisition of Legal & General’s U.S. business or Nippon Life’s recently announced acquisition of Resolution Life.”

Japan’s insurance industry is highly consolidated, especially in the non-life segment with a few major companies dominating the market, which limits organic growth opportunities. Additionally, asset-intensive reinsurance (AIR) transactions have been gaining momentum in Japan’s life insurance segment in recent years as companies look to improve capital efficiency and for better interest rate risk management.

“AM Best expects large Japanese insurers to continue seeking growth opportunities overseas, and even in non-insurance areas, supported by their strong capital,” said Chanyoung Lee, director, analytics, AM Best. “Additionally, Japan’s life insurers are likely to expand reinsurance transactions as a long-term capital management strategy, while major non-life insurers also are likely to have more excess capital in the coming years by divesting their strategic equity holdings.”

To access the full copy of this commentary, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=352784.

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in New York, London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

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U.S. insurers owned by Japanese companies have seen growth in direct premiums written the last four years, exceeding $68 billion in 2024.