Market opportunities for reinsurance

In July, Howden entered the Japanese market with the launch of Howden Re Japan via an insurance-linked securities (ILS) partnership with Keystone ILS Capital. Here, Kentaro Tada, Hiro Miyamoto and Andy Souter of Howden Re discuss the challenges and opportunities facing the broker in the market.

What drove Howden’s decision to enter the Japanese reinsurance market?

Hiro Miyamoto: The Japan market has always been one of great interest and appreciation for our founder, David Howden, whose ancestor had a long-standing presence in the market. 

The current reinsurance market within Japan has been tightly controlled by a select number of participants. With our entry, we offer refreshed and new models, underpinned by a team of global and local top talent, client-facing service, fully integrated broking, capital markets advisory, and ILS. 

Kentaro Tada: It is worth taking a moment to reflect on the history aspect. Alexander Howden (ancestor of David Howden and founder of an insurance business of the same name) had a strong presence in Japan for a long time prior to the business’s sale in 1993. Following in his great-great-great grandfather’s footsteps, it is the wish of our founder to return to the market and build a new chapter of successful long-standing growth.

How do you plan to differentiate Howden Re Japan from other reinsurance brokers?

Andy Souter: Where we differentiate ourselves is through our innovative solutions, forged through by maximising group synergy across business units in addition to reinsurance and ILS in Japan. Through this, Howden Japan will aim to offer innovative solutions underpinned by collective power including managing general agent and captive insurance expertise.

“We see ILS as a diversifying source of capacity to fill the protection gap.” Kentaro Tada

How do you see the role of ILS evolving?

Tada: We see ILS as a diversifying source of capacity to fill the protection gap and to create innovative solutions for emerging and/or complex risks which would fit investors’ risk appetite. Our partnership with Keystone, coupled with our ILS capabilities within Howden Capital Markets & Advisory (HCMA), allows us to advise clients locally while accessing global ILS markets. 

What are the unique challenges in the Japanese reinsurance landscape?

Souter: Our Japan business will be fully integrated with various other divisions, primarily in London/Singapore, and while we have dedicated expertise within the Japanese market, there will be an emphasis on seamless global collaboration to ensure we are bringing innovative, data-driven insight to our clients, bringing collective global expertise to meet the ever-more complex needs of clients in Japan. 

Miyamoto: Indeed. This means clients will have better access to any specialist products and service offerings through Howden Re Japan via the collective expertise across the global group. 

“We place great value on forging trusted relationships with our clients.” Hiro Miyamoto

What are the future growth plans for Howden Japan?

Miyamoto: In the Japanese market, where the emphasis is on long-term business relationships, we place great value on forging trusted relationships with our clients. That will be our initial focus and carry across every action we take. Our approach is to proceed in a way that fosters medium- to long-term growth rather than pursuing short-term, immediate results. 

Tada: It is important to bear in mind the coming regulatory changes and how they will affect the role that brokers can play. For instance, the presence of in-house agencies, which has been the reason brokers have not been able to expand their market share, is about to change dramatically. 

The role brokers can play in insurance and reinsurance, along with, or instead of, in-house agencies, will undoubtedly expand. By 2030, our goal is to have achieved the same degree of presence that other brokers have accumulated over several decades in Japan. 

Souter: Our investment in Howden Re Japan is a long-term commitment to the Japanese market. As Hiro mentioned, we’re aiming to be the major broker choice by the end of the decade, as a leading risk, capital and strategic advisor. 

“We are fully committed to delivering a differentiated proposition in Japan.” Andy Souter

We know this is possible only through a long-term approach to investment and commitment, alongside a deep understanding of the unique needs of the Japanese market. Our investment will encompass broking, analytics, and advisory as well as client-servicing infrastructure. 

This is coupled with a unique culture that embraces seamless collaboration across the Howden Re Group, within the market and across our global offices. We are fully committed to delivering a differentiated proposition in Japan and look forward very much to continued growth in the market. 

Kentaro Tada is chief executive officer of Howden Re Japan. He can be contacted at: kentaro.tada@howdengroup.com

Hiro Miyamoto is managing director of Howden Re. He can be contacted at: hiro.miyamoto@howdenre.com

Andy Souter is managing director, head of Asia-Pacific at Howden Re. He can be contacted at: andy.souter@howdenre.com

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