Page 19 - Insurance Times November 2022

Japan general insurance 2021 to JPY33,545.4 billion ($313.3 bil- Swarup Sahoo, Insurance analyst at
lion) in 2026, in terms of direct writ- GlobalData, comments: “Growth in
market to reach $133.1 bil-
ten premiums (DWP), forecasts 2021 was supported by the introduc-
lion in 2026, driven by com- GlobalData, a leading data and tion of coinsurance in 2020 that al-
analytics company. lowed insurers to transfer various fi-
mercial insurance demand
According to GlobalData, the Japanese nancial risks such as investment risk,
The general insurance market in Japan interest rate risk, insurance risk, etc.
life insurance industry registered 2.4%
will grow at a compound annual
growth in 2021 after two consecutive to reinsurers. Also, the country’s sus-
growth rate (CAGR) of 3.0% from
years of decline in 2019 and 2020. ceptibility to natural disasters has in-
JPY11,155.4 billion ($101.6 billion) in
creased insurers’ catastrophic risk and
2021 to JPY12,920.7 billion ($133.1 bil- forced them to increase the portion of
Climate change and regu-
lion) in 2026, in terms of gross written
ceded premiums with reinsurers. This
premiums (GWP), driven by a rise in latory developments to has also supported the reinsurance
demand for commercial insurance growth in 2021.”
drive South Korea reinsur-
lines, forecasts GlobalData, a leading
data and analytics company. ance industry to reach The reinsurance market growth in
South Korea will be supported by the
According to GlobalData, increased $11.9bn in 2026
expected roll out of the new capital
frequency of Natural-Catastrophic The South Korean reinsurance industry regime, Korean Insurance Capital Stan-
(Nat-Cat) events, cyber-attacks, and will grow at a compound annual
dard - K-ICS starting from 2023, along
geopolitical risks will drive demand for growth rate (CAGR) of 7.0% from
with the continuation of the existing
commercial insurance lines such as KRW9.6 trillion ($8.4 billion) in 2021 to
IFRS-17 regime.
property and liability insurance. KRW13.4 trillion ($11.9 billion) in 2026,
Insurers will be required to maintain
in terms of gross written premiums
higher risk-based capital as per the
Japan life insurers face (GWP), supported by climate change
new regime, which will result in
and positive regulatory developments,
tough road ahead over squeezing their capital buffer and in-
predicts GlobalData, a leading data
creasing the dependence on reinsur-
next five years and analytics company.
ance. Reinsurers will also benefit from
The road ahead looks difficult for Japa- GlobalData’s Global Insurance Database
coinsurance as it allows insurers to
nese life insurers because of the reveals that the South Korean reinsur-
manage capital effectively by transfer-
country’s aging demographic and eco- ance industry registered a 6.6% growth
ring risks.
nomic factors. Due to sluggish sales of in 2021, recovering from a subdued 0.7%
term life and savings products, the growth in 2020 due to the economic Also, the introduction of compulsory
Japanese life insurance industry is ex- impact of the COVID-19 pandemic. Gen- liability insurance for medical device
pected to grow at a compound annual eral reinsurance accounted for 78% of manufacturers and importers in 2022
growth rate (CAGR) of 2.6% from the country’s reinsurance market, while is expected to support general reinsur-
JPY29,427.8 billion ($274.9 billion) in life reinsurance occupied a share of 22%. ance growth.
The Insurance Times November 2022 17