Japanese reinsurance cedents continue to access the insurance-linked securities (ILS) market for capacity with the catastrophe bond the preferred structure, underscoring the strategic role of cat bonds, AM Best has said. But changes coming to the Japanese insurance market through M&A could influence the amount of risk flowing to the ILS market, at least for a time.
Commenting on the Japanese market and cedent appetite for reinsurance, AM Best noted that the reinsurance market there turned in April 2024 with a softening trend emerging that persisted through 2025.
Abundant capacity drove strong reinsurance execution for Japanese cedents and the hard market cycle across Asia Pacific ended, the rating agency explained.
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