Japan’s general insurance industry has installed a new leader at a point when the regulatory and competitive terms of the market are being rewritten. Koji Ishikawa of Sompo Japan Insurance has become chairman of the General Insurance Association of Japan (GIAJ), and his opening statement placed the recovery of customer and public confidence at the centre of the trade body’s plans for fiscal year 2026.

The appointment carries added weight because Sompo Japan sat at the centre of the misconduct cases that reshaped the sector’s regulatory agenda. In January 2024, the Financial Services Agency (FSA) issued business improvement orders to Sompo Japan Insurance and parent Sompo Holdings over their handling of fraudulent automobile insurance claims by used-car dealer Big Motor, faulting the insurer’s decision to resume customer referrals to the dealer and the secondment of its employees to the company.

Separately, on Oct. 31, 2024, the Japan Fair Trade Commission issued cease-and-desist and surcharge orders against Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance, Mitsui Sumitomo Insurance, and Aioi Nissay Dowa Insurance, along with agent Kyoritsu, over nine cases of premium coordination on contracts for corporate policyholders including JERA, Cosmo Oil, and Tokyu Corporation. The four insurers were later required by the FSA to revise their business improvement plans after customer information leaks were uncovered.

An oligopoly under scrutiny

The reforms land on one of the world’s most concentrated non-life insurance markets. Direct premiums written by GIAJ member companies reached ¥10,344.2 billion in fiscal 2024, up 4.3%, largely driven by higher fire insurance premiums. The market remains dominated by the three major insurance groups – Tokio Marine, MS&AD, and Sompo – following decades of consolidation after the 1990s financial reforms. Against that backdrop, the June 2026 reforms, including comparative sales rules, tighter agency oversight, and a forthcoming review of in-house agency regulation, are collectively intended to promote fairer competition, strengthen governance, and improve customer outcomes. Against that setting, Ishikawa said the industry would treat recent rule changes as “an irreversible transformation” rather than a revision of rules, with the aim of becoming an industry that “truly pursues the best interests of our customers.”

What the June 2026 rules change

Partial amendments to the Insurance Business Act, promulgated in June 2025, took effect on June 1, 2026, with supervisory guidelines revised in parallel. The changes impose additional internal-system obligations on large multi-representative agencies, including appointing compliance and supervisory officers, and require insurers to monitor part-time agencies whose side businesses are compensated through insurance claim payments. GIAJ said it would publish a guide on comparative recommendation sales, advance a continuing-education requirement for agents targeted for 2028, and operate a Compliance Officer Qualification System tied to the new obligations.

The distribution model those rules touch is heavily agency-based: direct premiums written through agents accounted for 89.7% of total direct premiums in fiscal 2024, and the market counted 140,138 agents and about 1.78 million agent sales staff at the end of the year. A less agency-dependent market would create room for channels that already hold licenses but write far less business, including direct writers such as Sony Assurance, SBI, and Rakuten and the 22 licensed foreign insurers operating in Japan. The statement also flagged a coming review of the Specified Contract ratio regulations, which govern in-house corporate agencies, and said the industry needed to move away from Japan-specific practices toward global standards, a direction the FSA has echoed in calling for corporate buyers to trade non-life products priced to their individual risks.

Agency quality and fraud

GIAJ began full operation of its Agency Business Quality Evaluation System in April 2026, adding a supporting industry system in June; the framework covers 31 companies and is assessed by the Council on Agency Business Quality. On fraud, a GIAJ survey published in May 2026 found public awareness limited, and the statement cited cases of people recruited into fraud through social media offers of illegal work known as “yami baito.” GIAJ said it would work more closely with the National Police Agency and reexamine its Fraudulent Claims Prevention Systems.

Capital, catastrophe, and cross-holdings

Several structural shifts frame the year. An economic value-based solvency framework, aligned with the international Insurance Capital Standard, took effect at the end of March 2026, according to Chambers and Partners. The three mega groups are unwinding cross-shareholdings, a step GIAJ directed its members to take in September 2023 in the aftermath of the price-fixing scandal; the three planned to sell about ¥1.84 trillion of such shares in the year ending March 2025 and have said they will cut the holdings over six to seven years, according to Japan Times.

The disaster exposure underlying GIAJ’s resilience agenda is substantial: the 2024 Noto Peninsula earthquake generated ¥104.2 billion in residential earthquake claims. GIAJ said it would build a resilient earthquake-insurance damage assessment system ahead of a possible Nankai Trough or Tokyo Inland earthquake, and noted the government’s plan to establish a Disaster Management Agency in November 2026. Ishikawa called fiscal year 2026, the final year of the association’s 10th Medium-Term Master Plan, “an exceptionally important year” for consolidating progress on trust and setting up the next plan.