Captive Programs of the Japanese Corporate Insurance Buyers : Why only few of them?

Abstract

In the course of globalization of industrial economy and in ever-changing social environment, the circumstances surrounding the enterprises are deteriorating not only because of the property risks but also due to the litigation risks caused by products liability, errors and omission by officers and directors etc. In the case of North American and European countries, it is a generally observed business practice for the big enterprises to hedge various risks by establishing their own captive insurance companies as well as to utilize techniques of “alternative risk transfer”. In Japan on the contrary, only few captive insurance companies are activating except big transnational corporations. The paper makes an analysis of the reasons and background from historical and institutional point of view and makes proposal for the future improvement.