Japan’s insurers secured favourable terms and pricing reductions during the April 1 reinsurance renewal season, supported by strong financial results, a lack of major catastrophe losses, and abundant capacity, according to global broking group Aon.
According to Aon’s April 2026 renewal Reinsurance Market Dynamics report, which explores the Japan-focused 1.4 renewal season, interest in frequency protection in Japan is expected to grow with availability of more attractive pricing levels.
The report highlights that demand for reinsurance remained stable, supported by the strong financial position of Japan’s insurers.
Recent regulatory reforms targeting governance and risk management triggered a period of insurance pricing increases and underwriting actions, as well as the sale of crossshareholdings.
Coupled with a lack of major catastrophe events since 2019, these factors have allowed insurers to maintain healthy profits and strong capital levels, the broker noted.
As a result, capacity at April 1 was plentiful, driven by existing reinsurers looking to maintain or expand their portfolios. Additionally, the relative weakness of the Japanese Yen against other major currencies also helped fuel oversupply for reinsurance capacity.
Despite the competitive environment, insurers prioritised long-term relationships, resulting in very little change to existing reinsurer panels.
Importantly, terms and conditions (T&Cs) were largely stable, and Aon notes that while most insurers kept attachment points and limits, some adjusted limits, with a few buying down.
Frequency products are now more widely available; Japanese buyers may find earnings protection attractive due to pricing, according to the report.
Moreover, Aon secured pre-paid reinstatements at the top end of catastrophe excess of loss programs for insurers where desired, with cat excess of loss programmes seeing pricing reductions ranging from 15% to 18%.
While terms and conditions remained stable, pricing saw notable downward shifts across several key areas.
Aon further states that April 1 has seen continued appetite for proportional reinsurance treaty solutions from reinsurers. Rate hikes and underwriting shifts in the primary market since 2023 have increased reinsurer appetite for proportional treaty business covering both fire and earthquake risks. Increased competition and strong insurer performance led to commission increases, typically 3% to 5%.
Nick Bayman President, Japan London Team Reinsurance Aon, noted: “The reinsurance market can play a much bigger role in supporting our clients going forward.
“There’s still a huge protection gap in Japan, particularly in the earthquake space. We are working with insurers to find ways to help them better support their customers, including the use of parametric covers and other innovative capital solutions.”
On risk excess of loss (both domestic only and when combined with overseas/ JIA exposures) Aon saw similar favourable outcomes to those observed in other lines of business.
The improvement in original underwriting and increased appetite from reinsurers, on a stable market purchase, led to reductions of around 10%.
Also at April 1, Aon reports that conditions in the casualty reinsurance market were favourable, albeit with more moderate reductions than for property. Significant improvements in primary underwriting and strategic use of facultative reinsurance solutions for North American exposures have made Japanese casualty treaty business more attractive for reinsurers, resulting in high single to low double-digit reductions at renewals.
More robust governance and risk management combined with the unwinding of large crossshareholdings has encouraged Japan’s major non-life insurers to continue their push into overseas markets to diversify their portfolios.
Sompo Holdings completed its acquisition of specialty insurer and reinsurer Aspen in February, while Mitsui Sumitomo Insurance took a 15% stake in US insurer WR Berkley in March.
As a result, Japan’s large insurers are taking a more joined-up approach to reinsurance and being more deliberate in how they manage reinsurer relationships globally, the report concluded.
Philippe Sommer CEO, Japan Reinsurance Aon, commented: “Once the dust settles on the April 1 renewal we will work with insurers on how to further optimize their reinsurance purchasing and make their coverage work harder for them.
“With relatively few losses in the past two years, Japanese insurers have yet to feel the pinch, but history tells us that losses will come back, and insurers are currently sitting on substantial retentions. With so much capital and appetite in the reinsurance market, now is the time to buy down retentions and consider frequency covers.”
