Marsh plans of Japan joint venture with MST Insurance Service: Report

The venture plans to offer specialised corporate insurance recommendations.

Insurance broker Marsh has partnered with Japanese firm MST Insurance Service to establish MST Marsh, a joint venture focusing on offering specialised corporate insurance recommendations, Nikkei Asia reported.

This venture aims to address an industry still reeling from a price-fixing scandal. MST Marsh, a 50-50 collaboration, targets midsize to large businesses with annual sales ranging from Y30b to Y200b (approximately $200m to $1.3b).

MST Marsh's unique approach involves tailored insurance suggestions, covering traditional areas like fire and liability insurance as well as emerging risks such as cyberattacks and supply chain disruptions. 

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In Japan, many companies typically purchase insurance through in-house agencies lacking specialized expertise. 

This lack of expertise contributed to recent price-fixing issues involving major casualty insurers. 

MST Marsh seeks to mitigate this by providing agents who better understand clients' risks, reducing the likelihood of inappropriate coverage and helping companies assess the fairness of their premiums. 

Additionally, independent agents are less prone to conflicts of interest compared to in-house agents.

Marsh traditionally operates as an insurance broker, representing customers in search of coverage.

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Brokers, situated on the buyer's side, are generally seen as more aligned with a company's interests than agencies, which represent insurance sellers. However, the broker model has had limited success in Japan, accounting for only about 1% of the insurance market.

Marsh's collaboration with MST, a significant insurance agency linked to a financial institution in Japan, positions them to expand their customer base. MST has a longstanding relationship with MUFG Bank. 

MST Marsh, although functioning as an insurance agency, will leverage Marsh's global broker expertise to enhance their offerings in the Japanese market.