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Berkley Insurance eyeing expansion in Japan, Asia CEO says

Berkley Insurance Asia is looking to expand in Japan, potentially taking advantage of a growing market for specialty insurance, the company's CEO said Oct. 10 at an industry conference in Hong Kong.

"Japan is an attractive market because retention ratios are very high compared to some other markets," Shasi Gangadharan, CEO of the W. R. Berkley Corp. unit, told S&P Global Market Intelligence on the sidelines of the FT Asia Insurance Summit. He noted that this is important for a property and casualty insurer because policies are expected to renew every year.

Berkley Insurance Asia has already been running a representative office in Tokyo without taking any business. The insurer sells policies to customers in Hong Kong and Singapore and underwrites in China through Lloyd's of London Syndicate 1967.

It operates as a branch of Berkley Insurance Co.

Berkley's approach when entering a new market is to work with local companies to tap distribution channels, but Gangadharan said the company has not yet established a timeframe for Japanese expansion and is looking at all options.

In the fiscal year ended March 31, Japan's four largest property and casualty insurers controlled 83.9% of the market by net premiums written.

Gangadharan said during an earlier panel discussion that although Japan is a mature market and foreign insurers only take a small market share, its domestic insurance market is still huge. He also said the country has a strong demand for specialty insurance, in which Berkley specializes.

Japan's overall P&C insurance market grew 1.7% year over year in the fiscal year ended March 31, but the market for insurance other than auto grew faster, at 3.4%. With premium rate cuts constraining growth in the auto line — still the largest by far — Japanese insurers have pivoted to specialty products such as directors' and officers' liability and cyber insurance.

Once it establishes a foothold in Japan, Berkley will focus on selling the products it offers elsewhere in Asia, including D&O liability and casualty products such as export products liability insurance, Gangadharan told S&P Global Market Intelligence.