HONG KONG, May 23 (Bernama-BUSINESS WIRE) — Japan’s non-life insurers are facing pressure to rebuild catastrophe reserves amid rising reinsurance costs that follow a catastrophe loss-heavy year in 2018, according to a new AM Best market segment report.
Last year marked a record for natural disasters in Japan as a series of events resulted in significant insured losses, the costliest being Typhoon Jebi. In the new Best’s Market Segment Report, titled, “Japan Non-Life Insurers Focus on Profitability,” AM Best states that because of the disasters, Japan’s non-life carriers released a sizeable portion of their catastrophe reserves. The amount of catastrophe reserves released by Japan’s three non-life insurance giants—Tokio Marine & Nichido Fire Insurance Co. Ltd., MS&AD Insurance Group Holdings, Inc., and Sompo Japan Nipponkoa Insurance Inc.— in the third quarter of fiscal-year 2018 (October-December) totaled approximately JPY340 billion (USD3.07 billion). These reserve releases represented a 13% net reduction of the insurers’ overall catastrophe reserves balance. The vast majority of these reserve releases came from the fire and allied line, and as a result, catastrophe reserves for this line declined by nearly 40%.