Japan P&C market to hit $80b as cyber surges 17%

Automobile insurance held 50.38% of the market in 2025.

Japan’s property and casualty insurance market is expected to grow from $71.75b in 2026 to $80.09b by 2031, representing a compound annual growth rate (CAGR) of 2.22%.

The market was valued at $70.19b in 2025 and continues to expand as insurers adjust pricing and coverage following a series of major catastrophe events, including the 2024 Noto Peninsula earthquake and severe storms, according to research by Mordor Intelligence.

Mordor Intelligence said the industry is also adapting to Japan’s new economic value-based solvency framework, introduced by the Financial Services Agency in March 2026, which has increased capital and disclosure requirements for insurers.

Automobile insurance remained the largest business line in 2025, accounting for 50.38% of the market. 

Cyber insurance is forecast to record the fastest growth, with a projected CAGR of 17.38% through 2031.

The report said telematics-based motor insurance programmes are expanding in Japan as insurers use driving behaviour and vehicle data to improve pricing accuracy and claims management. 

Property insurance pricing also continued to rise following heavy catastrophe losses. 

Claims from the January 2024 Noto Peninsula earthquake reached $0.67b across 126,698 policies, whilst a major hailstorm in Hyogo in April 2024 generated $0.87b in claims across 149,612 policies. 

Typhoon Shanshan added a further $0.35b in claims.

The report said insurers are tightening underwriting standards, particularly for older buildings and higher-risk properties, whilst promoting mitigation measures such as earthquake-resistant construction through premium discounts.

Reinsurance maintains a liability cap of $76.82bper event, with the government covering around 99.7% of claims above $2.57b.

Underwriting received approval to launch a parametric earthquake insurance product in Japan using official seismic intensity triggers and fixed payouts without deductibles.