Latest news with #nonlifeinsurance
Japan Times
3 days ago
- Automotive
- Japan Times
Scandals put Japanese nonlife insurers' business model at a crossroads
The nonlife insurance industry stands at a crossroads as it confronts the need to overhaul its long-standing business model. For nearly three decades, since the revision of the insurance business law in 1996, the sector has undergone steady deregulation. A series of recent scandals, however, has brought to light deeply entrenched and problematic business practices within the industry. As Japan moves toward an era of fairer competition, nonlife insurers now face pressure to reform their business structures and adapt to new market expectations. Before the law was revised, insurance premiums for major products, such as fire and automobile insurance, were set uniformly for all companies under government regulation. The system was intended to prevent excessive competition and potential bankruptcies. As a result, nonlife insurers were unable to differentiate their services through pricing. In this environment, companies instead focused on building stronger relationships with customers, sales agents and other business partners to remain competitive. Even after legal reforms allowed greater flexibility in product design and premium setting, restrictive business practices persisted in various forms, continuing to distort healthy competition. In June 2023, it was discovered that four major nonlife insurers had colluded to prearrange premiums when bidding for joint insurance contracts, in which a company secures coverage from multiple nonlife insurers. The scandal exposed a widespread industry practice in which the number of shares held in a corporate client played a key role in securing and retaining insurance contracts. It also revealed that insurers frequently provided excessive services, such as purchasing products from their clients, in an effort to win or maintain business. The following month, former Bigmotor, a major used automobile dealer and repair service provider, was found to have engaged in fraudulent insurance claims. In exchange for being assigned auto insurance contracts with buyers of secondhand vehicles sold at Bigmotor, nonlife insurers provided the company with excessive favors. They included referring vehicles involved in accidents to Bigmotor for repairs, purchasing vehicles with their employees' own money and assisting at Bigmotor's sales events. "Since insurance products lack patent protection and can easily be replicated, a unique and inefficient competitive structure has developed in the industry, making it difficult to eliminate the detrimental practices of competing in areas beyond core insurance offerings," said Satoru Komiya, chairman of Tokio Marine Holdings, during his term as president. In the wake of recent scandals, Japan's Financial Services Agency has repeatedly imposed administrative penalties on major nonlife insurance companies. These measures are intended to push them away from a relationship-dependent business model, which has become fertile ground for misconduct. In response to shifting market conditions, MS&AD Insurance Group Holdings is considering the dissolution of its dual-company structure for nonlife insurance operations. The holding company is discussing plans to merge its two key subsidiaries — Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance — which have operated separately since the 2010 business integration that formed MS&AD. Commenting on the proposed realignment, an industry observer noted that with competition intensifying, "the scale of business will become increasingly important in various respects." Japan's insurance market is contracting, driven largely by the declining national population. Furthermore, increasingly severe natural disasters and more complex risk factors are placing additional pressure on insurers. To remain competitive in this challenging environment, MS&AD President Shinichiro Funabiki stresses the importance of "strengthening capital so that a single company can take on large risks." Major nonlife insurers are seeking to differentiate themselves in their core businesses. They are developing innovative products that leverage artificial intelligence and big data, capitalizing on their economies of scale to gain an edge in the market. To strengthen the price competitiveness of their products, expand overseas operations and invest in new fields, companies will need significant capital, a reallocation of human resources and enhanced business efficiency. Tokio Marine aims to "strengthen its ability to provide solutions in areas such as disaster preparedness and mitigation that other nonlife insurers cannot easily replicate," Komiya said. More than a quarter century after the insurance industry was liberalized through legislative reforms, Japanese nonlife insurance companies are finally taking meaningful steps toward genuine competition.
Associated Press
16-06-2025
- Automotive
- Associated Press
Best's Market Segment Report: Taiwan's Non-Life Insurance Premiums Continue to Increase Amid Underwriting Improvements
HONG KONG--(BUSINESS WIRE)--Jun 15, 2025-- Taiwan's domestic non-life insurance premium continued to increase in 2024, growing 10.5% to reach TWD 278.5 billion (USD 9.2 billion), according to a new AM Best report. The Best's Market Segment Report, 'Taiwan Non-Life Segment's Operating Performance Supported by Tighter Underwriting Guidelines,' also notes that this segment's overall capital & surplus level has continued to improve and crossed the TWD 150 billion mark last year. The driving force of Taiwan's non-life segment remains motor insurance, particularly voluntary motor, which contributed close to half of the segment's direct written premiums in 2024, despite the slightly slower overall premium growth last year, partly due to subdued growth in new car sales during 2024 and through the first quarter of 2025. In order to bolster electric vehicle (EV) coverage, Taiwan's insurance regulator implemented standardised EV motor policy terms in the second half of 2024. 'However, the motor segment remains cautious over expanding in this product line while insurers continue to accumulate data and claims experience to aid pricing sophistication,' said James Chan, director, AM Best. The combined gross written premiums of AM Best's eight rated non-life insurers rose 10.6% to TWD 192.8 billion in 2024, similar to the market's growth of 10.5% reported by all 14 domestic non-life insurers. All rated entities achieved premium gains in 2024, driven by expansions in voluntary motor, travel insurance and commercial lines. According to the report, Taiwan's non-life insurance segment achieved significant improvement in operating profitability for 2023 and 2024. Notably, following a year of historically poor performance in 2022, the market achieved a profit turnaround in 2023, due to the release of pandemic insurance-related reserves and the efforts of non-life insurers to bolster underwriting guidelines. 'Company strategies have included non-renewing unprofitable policies, increasing rates, raising policy deductibles, or applying higher co-insurance percentages,' Chan said. 'These measures are aimed at passing on part of the rising reinsurance costs and potential future losses to policyholders. Insurers also have adopted a more proactive approach in offering risk advisory services and implementing loss prevention measures.' To access the full copy of this report, please visit © 2025 by A.M. Best Company, its affiliates. ALL RIGHTS RESERVED. View source version on CONTACT: James Chan Director, Analytics +852 2827 3418 [email protected] Cynthia Ang Senior Industry Research Analyst +65 6303 5026 [email protected] Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 [email protected] Al Slavin Senior Public Relations Specialist +1 908 882 2318 [email protected] KEYWORD: EUROPE HONG KONG ASIA PACIFIC INDUSTRY KEYWORD: FINANCE DATA ANALYTICS PROFESSIONAL SERVICES OTHER PROFESSIONAL SERVICES INSURANCE SOURCE: AM Best Copyright Business Wire 2025. PUB: 06/15/2025 08:00 PM/DISC: 06/15/2025 07:59 PM
Yahoo
16-06-2025
- Automotive
- Yahoo
Best's Market Segment Report: Taiwan's Non-Life Insurance Premiums Continue to Increase Amid Underwriting Improvements
HONG KONG, June 16, 2025--(BUSINESS WIRE)--Taiwan's domestic non-life insurance premium continued to increase in 2024, growing 10.5% to reach TWD 278.5 billion (USD 9.2 billion), according to a new AM Best report. The Best's Market Segment Report, "Taiwan Non-Life Segment's Operating Performance Supported by Tighter Underwriting Guidelines," also notes that this segment's overall capital & surplus level has continued to improve and crossed the TWD 150 billion mark last year. The driving force of Taiwan's non-life segment remains motor insurance, particularly voluntary motor, which contributed close to half of the segment's direct written premiums in 2024, despite the slightly slower overall premium growth last year, partly due to subdued growth in new car sales during 2024 and through the first quarter of 2025. In order to bolster electric vehicle (EV) coverage, Taiwan's insurance regulator implemented standardised EV motor policy terms in the second half of 2024. "However, the motor segment remains cautious over expanding in this product line while insurers continue to accumulate data and claims experience to aid pricing sophistication," said James Chan, director, AM Best. The combined gross written premiums of AM Best's eight rated non-life insurers rose 10.6% to TWD 192.8 billion in 2024, similar to the market's growth of 10.5% reported by all 14 domestic non-life insurers. All rated entities achieved premium gains in 2024, driven by expansions in voluntary motor, travel insurance and commercial lines. According to the report, Taiwan's non-life insurance segment achieved significant improvement in operating profitability for 2023 and 2024. Notably, following a year of historically poor performance in 2022, the market achieved a profit turnaround in 2023, due to the release of pandemic insurance-related reserves and the efforts of non-life insurers to bolster underwriting guidelines. "Company strategies have included non-renewing unprofitable policies, increasing rates, raising policy deductibles, or applying higher co-insurance percentages," Chan said. "These measures are aimed at passing on part of the rising reinsurance costs and potential future losses to policyholders. Insurers also have adopted a more proactive approach in offering risk advisory services and implementing loss prevention measures." To access the full copy of this report, please visit 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 Copyright © 2025 by A.M. Best Company, Inc. and/or its affiliates. ALL RIGHTS RESERVED. View source version on Contacts James Chan Director, Analytics +852 2827 3418 Cynthia Ang Senior Industry Research Analyst +65 6303 5026 Christopher Sharkey Associate Director, Public Relations +1 908 882 2310 Al Slavin Senior Public Relations Specialist +1 908 882 2318 Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
