Earthquake of magnitude 5.1 hits near Tokara Islands in Kagoshima Prefecture, Japan; epicenter depth approximately 10 km.

Earthquake of magnitude 5.1 hits near Tokara Islands in Kagoshima Prefecture, Japan; epicenter depth approximately 10 km.

In a significant development for the Japanese insurance market, HDI Global has received regulatory authorization to offer parametric earthquake covers to Japanese corporations. This authorization, granted by the relevant regulatory bodies, is set to introduce greater competition and availability of parametric coverage in a market with significant earthquake exposure [1].

The new coverage, structured by Descartes Underwriting, is designed to trigger claims based on the Japan Meteorological Agency's Shindo seismic intensity scale. It covers earthquake losses, including property damage, direct and contingent business interruption, and both tangible and intangible losses. This move is expected to bring greater competition to a market that has been dominated by a single insurer until now [1].

The earthquake of magnitude 5.1 that hit near the Tokara Islands in Kagoshima Prefecture, Japan, on July 2, 2025, with an epicenter depth of approximately 10 km, underscores the need for robust insurance solutions. The recent seismic activity highlights the importance of parametric coverage, which provides swift and transparent claims settlement based on predefined triggers [1].

Dirk Hoering, member of HDI Global's executive board responsible for property, engineering, and marine insurance, commented on the regulatory changes that are fostering heightened competition and the introduction of new insurance solutions to improve customer protection. Violaine Raybaud, chief operating officer of Descartes, noted that Generali Global Corporate & Commercial will be a key reinsurer of the new product [1].

This development is expected to have a positive impact on the Japanese insurance market, providing corporations with more options for earthquake risk management. The introduction of parametric coverage aligns with the industry's trend towards innovation and improved customer protection.

References:
[1] https://www.tradingview.com/news/reuters.com,2025:newsml_L6N3TB0BA:0-hdi-and-descartes-authorised-to-offer-parametric-quake-cover-to-japanese-corporations/