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The Collaborative Clearinghouse for Lawsuits and Other Claims Against ACE Group Insurance Companies

ACE Eyes Japan, Greenburg Says

May 21, 2012 - Japan-based insurers, faced with a shrinking population base and dim economic prospects, are looking to drum up business elsewhere in the world.

ACE Ltd. apparently sees this as wrong-headed, as CEO Evan Greenburg has publicly stated that the Swiss insurance giant is “on the hunt” for business opportunities in the land of the Rising Sun.

“We’re seeing some opportunity and that may accelerate,” Greenberg said on an analysts call.

Bloomberg reported that in that call, Greenburg said that Japanese insurers have been naïve in their underwriting. He said local companies may have charged too little in an effort to maintain contracts in their home countries.

Following the March 2011 earthquake and ensuing tsunami, reinsurance rates rose as much as 60 percent for earthquake coverage and less for other risks, Swiss Re reported.

ACE does business in 50 countries and has been on a miniature expansion boom in the Far East. It has bought businesses in Hong Kong, South Korea and Malaysia, and spent $425 million to buy select Asian units of New York Life Insurance Co. (To balance things out, it also has acquired insurance operations in the United States and Ecuador in recent months, as well.)

ACE already has a small presence in Japan. It boasts that that through companies it acquired that it has done business in that country for 90 years.

ACE certainly has had an opportunity to learn of the risk factors involved in Japan. In March, 2011, the company was reported by Bermuda-based Bernews to have estimated that it would sustain $200-$250 million in net after-tax losses as a result of the earthquake that struck that nation.

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