Introduction
With insurance premiums soaring and foreign investors taking a critical view, many companies are realizing that they can no longer rely on insurance companies. However, the majority of Japanese companies are still not accustomed to reviewing their own risks.
So, this time, we'll discuss why nowRisk ManagementThis article explains, through examples from major corporations, whether the training of specialists is necessary. It will be useful not only for business owners but also for anyone involved in risk management within their company.
We are living in an era where the conventional wisdom of insurance companies no longer applies.
The need to manage risks "our own responsibility" is increasing.
Why is there a shortage of risk management specialists now?
At his inaugural press conference in June 2025, Tokio Marine Holdings' President Koike-Shimazu stated, "Risk management is a crucial aspect of corporate management. We must transform this into a business opportunity."
This statement reflects a significant change occurring within the Japanese insurance industry.
Three factors that cause insurance premiums to rise
- Intensification of natural disasters – In recent years, large-scale typhoons and torrential rains have resulted in record-high losses for non-life insurance companies.
- Major non-life insurance companies are raising their prices. - Major non-life insurance companies are moving to raise premiums by approximately 10% starting in October 2024.
- A chain of industry scandals – A shift from a situation where corporate insurance was consistently operating at a loss to a more appropriate approach.
This means we are entering an era where it will no longer be possible to obtain the same level of insurance coverage as before.
Differences with Europe and the US: The perspective of "management responsibility"
In other countries, if an accident or scandal occurs and risk management measures are deemed insufficient, the management team itself can be sued. Therefore, most large corporations have dedicated risk managers (specialized departments).
Japanese companies still lack this awareness. The attitude of "mindlessly buying whatever insurance companies recommend" persists. This makes it difficult to maintain international competitiveness amidst increasing investment from Europe and the United States.
Three important facts you can learn from strengthening your risk management system
Point 1: Headquarters takes the lead in reassessing risks across the entire company.
Tomoo Murayama, president of Sompo Japan Insurance Inc., points out, "First, the head office should take the lead in understanding the risks it faces." This should not be left to the insurance company, but should begin with creating a "risk map of the company."
Specific steps:
- We will organize the accident frequency data for each department.
- Share past scandals and customer complaints throughout the entire company.
- Create a "worst-case scenario" plan and secure the budget.
Point 2: Companies with overseas subsidiaries have already implemented "captive insurance."
There is a good example provided by major beverage manufacturer Kirin Holdings. The company began to seriously focus on strengthening its risk management system 10 years ago.
– Unify the risk policy across the entire group.– Given that overseas subsidiaries have a higher level of risk management than the head office, we will establish company-wide standards.
– Also utilize overseas insurance.- Because Japanese insurance companies alone have limitations, we facilitate international insurance contracts through brokers.
–Introduction of captive insurance – Acquiring the private insurance company previously owned by its Australian subsidiary in 2023 to enable sustainable risk management.
Foreign-owned insurance companies face strict scrutiny and are required to provide detailed disclosures annually. This itself contributes to the sophistication of their risk management systems.
Point 3: Investing in in-house agents (internal experts)
Kirin Holdings recognized that "developing and securing human resources is essential," and consolidated the agencies that were previously located in each subsidiary into the head office. This system allows the entire holding company to handle a portion of the risk management operations.
This approach helps us understand that "leaving everything to insurance companies in an increasingly uncertain business environment poses a new risk."
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Organizing supplementary information and specialized knowledge (for use in work)
Who is a "risk manager"?
Individuals specializing in risk management are called "risk managers." Their main duties include the following:
- To understand and manage all risks affecting the entire company.
- We will establish and review the insurance system.
- Seize business opportunities arising from risks.
Current shortage situation and future trends
Tokyo Marine Holdings' risk management training course, launched in March 2025, filled up immediately upon opening registration. Its popularity is such that a second course is planned for May, and a third course is scheduled for early next year.
Currently, many companies are considering insurance contracts and risk management strategies, but the reality is that "few companies are hiring people with specialized knowledge." This difference could determine future competitive advantages.
Note: Simply hiring people is not enough.
"Having a risk manager" is not the goal in itself; it needs to be considered in conjunction with "the ability to understand the company's risks and build an appropriate insurance portfolio."
The following points are particularly important:
- Annual disclosure of risk information and natural disaster information (in the case of foreign-owned insurance companies)
- Valuation management from the perspective of capital markets (the need to align with standards for Western investors)
Summary
As the saying goes, "After the rain, the ground hardens," and it is in times of uncertainty that a company's strengths are nurtured. Risk management is not merely a defensive measure, but a manifestation of management's "responsible attitude in shaping the company's future." While this culture has been cultivated over decades in Europe and the United States, it is time for Japan to start now.
The era of leaving everything to insurance companies is over; we must return to the common sense of "understanding and managing risks ourselves." The first step is leadership from headquarters and having experts within the company.
The real competitive advantage isn't about "not wanting to fail," but about "being able to turn any situation into a business opportunity."
