Japan’s Commercial Insurance Market Remains in a Hardening Phase

Japan’s commercial insurance market continues to be in a hardening phase as major domestic property and casualty insurers tighten their underwriting standards. Shinichi Kandatsu, Head of Commercial Risk Solutions at Aon Japan, stated that these insurers account for approximately 90% of the commercial market and are adjusting their underwriting approaches across key insurance lines, according to Aon’s Q3 2025 Global Insurance Market Insights Report.

Although the pace of property rate increases has slowed, overall pricing continues to rise. Directors and officers insurance is a notable exception, recording a slight decline in pricing during the quarter, while cyber insurance rates remain flat.

Capacity remains tight for property and liability lines, with domestic insurers reassessing their risk appetite to diversify their portfolios. For other lines, capacity remains sufficient.

Underwriters are requesting more detailed information at renewal, as insurers increasingly focus on profitability. Reductions in coverage limits, first noted in 2024, are now more common for large property and liability placements. Deductibles for property insurance continue to rise, while other classes remain stable.

Some domestic insurers are introducing new exclusions in casualty and liability policies, including punitive damages, terrorism, and earthquake risks. As a result, many clients are turning to foreign insurers to obtain alternative coverage options.

Key Features of Japan’s Commercial Insurance Market

KhaborwalaAJ
Source- InsuranceAsia