Insurers controlling 90% of Japan's market tighten terms

Pricing continues to rise, although the pace of property rate increases has slowed.

Japan’s commercial insurance market remains in a hardening phase as major domestic property and casualty insurers continue to tighten underwriting standards, according to Shinichi Kandatsu, Aon, head of Commercial Risk Solutions in Japan. 

These insurers account for about 90% of the commercial market and have been adjusting their underwriting approaches across several key lines, Aon’s Q3 2025 Global Insurance Market Insights Report.

Pricing continues to rise, although the pace of property rate increases has slowed. Directors and officers insurance is the main exception, recording a slight pricing decline during the quarter, whilst cyber insurance rates remain flat.

Capacity is still tight for property and liability lines, with domestic insurers reassessing their risk appetite as they attempt to diversify their portfolios. Capacity for other lines remains sufficient. 

Underwriters are requesting more detailed information at renewals as insurers focus more heavily on profitability.

Reductions in limits, which began appearing in 2024, are now more common for large property and liability placements. 

Deductibles for property insurance continue to rise, whilst other classes remain stable.

Some domestic insurers are also adding new exclusions for punitive damages, terrorism, and earthquake risks in casualty and liability policies. As a result, more clients are turning to foreign insurers for alternative coverage options.