The Japanese non-life insurance market continues to gain ground with strong results, rising rates and a distribution system that is being reshaped. The October 2026 update to the Insurance Market Report (Non-Life) for Japan, published by Axco Insurance Information Services, gives exclusive insights, new statistics, and on-the-ground research into the world's eighth-largest non-life market.
Growth and profitability
Non-life premiums written by domestic insurers reached JPY 10.74 trillion (USD 67.45 billion) in the year to 31 March 2026 (fiscal 2025), up 3.83%. This follows growth of 4.30% the previous year. Rate increases in property and motor, together with sums insured rising due to inflation, drove the growth.
Underwriting results have improved sharply in the Japanese market. Underwriting profits grew by 185% to JPY 360.10 billion in fiscal 2025 and the combined ratio fell by 3.8 percentage points to 92.2%, according to the General Insurance Association of Japan (GIAJ). In contrast to many international markets, rates in Japan continued to rise in property, motor and liability through 2025 and 2026, with financial lines and corporate earthquake cover the main exceptions.
Regulation reshapes distribution
Law No 54, promulgated on 6 June 2025, amended the Insurance Business Law and authorised the Financial Services Agency (FSA) to revise its supervisory guidelines. The law is being implemented in stages. Two tranches of changes took effect on 28 August 2025 and 1 June 2026, with more expected in late 2026 and 2027.
The changes have four major impacts on corporate business.
- A new category of ‘Specified Large-Scale Multi-line Agencies’ (those earning more than JPY 2 billion a year in commissions from two or more insurers). Stricter rules are expected to make 50% to 60% of them unviable, resulting in sales or mergers.
- Active encouragement of brokers, which are seen as more professional and better qualified than agencies. The minimum guarantee deposit for brokers has been halved to JPY 10 million, and brokers may now handle contracts jointly with agents.
- A ban on seconding insurer staff to agencies.
- FSA pressure on insurers to sell around 5,900 cross-shareholdings in client companies, worth JPY 6.50 trillion, which should ease the pressure on clients to accept uncompetitive terms and conditions.
Divestment has released capital for investment in technology and overseas acquisitions. It has also lifted solvency ratios by 19 percentage points under the new economic value-based solvency model.
The FSA also plans to establish a separate Asset Management and Insurance Supervision Bureau.
Market structure and natural perils
Four groups hold over 85% of the company market and consolidation continues. MS&AD Insurance Group Holdings plans to merge Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance by April 2027, potentially creating the market's largest insurer.
Natural perils remain central to performance. A magnitude 7.1 earthquake struck Kumamoto prefecture on 28 July 2026, causing 38 fatalities, although damage and supply chain disruption were far lower than after earthquakes in the same area in 2016. Protection gaps remain wide, with only 35.4% of dwellings carrying earthquake cover in 2024, according to the GIAJ.
Outlook
The report identifies growth opportunities in the SME sector, earthquake cover, cyber, data centres and semiconductor manufacturing. The GIAJ is also expanding its Corporate Risk Management Support Programme into full risk manager training in fiscal 2026, which should benefit large international brokers.
An ageing and shrinking population continues to weigh on domestic volumes while the major insurers are still looking abroad for growth. The overseas subsidiaries of the major insurers wrote JPY 5.95 trillion in non-life premium in fiscal 2024, up 18.7% on the JPY 5.01 trillion reported last year.
For full analysis of the Japanese market, including line-by-line coverage and company statistics, visit Axco's Insurance Market Reports (Non-Life) page. For data queries, explore Axco Navigator.