Centuries ago—long before cyberattacks and supply chain shocks kept corporate executives up at night—two merchants in Japan were building the foundation of a global insurance giant that today helps companies weather very modern-day risks.
MS&AD Insurance Group Holdings traces its corporate roots back more than 350 years to 17th-century Japan. Two men, Takatoshi Mitsui, a merchant who revolutionized business and payment methods, and Masatomo Sumitomo, a former Buddhist monk who created a business empire rooted in those principles, laid the groundwork for the vast Mitsui and Sumitomo enterprise groups. Generations later, in the late 19th and early 20th centuries, these groups established the foundational insurance companies that would eventually merge in 2001 to become Mitsui Sumitomo Insurance.
Today, this organization is a core part of MS&AD—one of the largest global insurance companies, serving 48 countries with a large presence across Asia and Europe. MS&AD is the largest property and casualty insurer in the Association of Southeast Asian Nations, and it has a top-tier syndicate that operates as part of Lloyd’s of London. In 2027, MS&AD plans a major rebranding that will bring together its operations under the single MSIG brand and carry forward its core values of customer focus, integrity, innovation—uniting the business philosophies of both Mitsui and Sumitomo.
As MS&AD grows, it’s setting its sights on another endeavor: more rapidly expanding its U.S. presence. While the company has served Japanese businesses in the U.S. for 70 years, it sees a big opportunity to serve more U.S. companies. MSIG USA, a specialty commercial insurer, and MS Transverse, a hybrid fronting carrier—both which have been expanding in the U.S. in recent years—are well positioned for continued rapid U.S. growth.
“As we scale our business, we’re drawing on the global capabilities of MS&AD, including its reach across more than 40 countries and regions,” says Peter McKenna, CEO of MSIG USA. “Beyond our long-standing heritage, we have financial strength and a solid reputation, which are all important considerations to U.S. companies seeking a strong long-term partner.”
Helping U.S.
Companies Manage Emerging Risks
How a Japanese insurance giant with 350-year-old roots is expanding in the U.S. market.
Navigating
New Challenges
Growing political instability is also presenting new risks that U.S. companies must address. The recent Iran conflict is a prime example. “We support clients across the full risk spectrum, from insuring cargo and vessels to providing coverage for political risks such as asset seizure,” McKenna says. “Our offerings reflect the breadth of capability required to operate in today’s global environment.”
MSIG USA is well positioned to help U.S. companies manage these nuanced and often volatile risks. Thanks to the strong financial foundation provided by MS&AD, MSIG USA can hire top-tier underwriters and employ highly technical underwriting practices. It also can leverage MS&AD’s global experience and network and invest in data-driven technologies, he says. The company has been using artificial intelligence to help wade through the complexities of insuring companies against nuanced or less-common risks. Underwriting has traditionally required teams to review extensive documentation submitted by brokers and corporate clients before issuing a policy. Today, AI systems can analyze those submissions, incorporate external data sources and produce detailed risk assessments much quicker than humans.
“What used to take an underwriting team several days can now appear on an underwriter’s desk in minutes,” McKenna says. “These AI tools enhance how we assess risk, allowing our underwriters to focus their expertise where it matters most: on informed judgment and decision-making.”
The U.S. market is ripe for commercial insurers that deeply understand the elaborate risks that companies face today—including the evolving global cyberthreat landscape, climate change, and geopolitical impacts on trade and supply chains. MSIG USA specializes in covering such complex risks and has hired more than 200 experienced underwriters and industry specialists over the past two years. “These are areas where underwriting expertise is critical,” McKenna says. “They require judgment, discipline and a depth of experience that goes well beyond standardized or commoditized products.”
Take cyber liability coverage, McKenna says. Ten years ago, cyber insurance was a $1 billion industry; today, it’s a $17 billion one, and companies are dealing with new threats that can have devastating business impacts if not protected against. “Cyber insurance is one of the most dynamic and fastest-growing areas of risk globally,” he says. “It’s ever-changing, whether it’s individuals on the dark web or even foreign governments perpetrating the crimes.”
“Where true skill and experience matter—such as in energy, aviation, cyber—MGAs allow specialized underwriting talent to focus on those risks,” Paulsson says.
While MS Transverse was a pioneer among hybrid fronting carriers, it remains a leader in the space because of its strong credit rating, its dedicated focus on serving MGAs and its expertise and reputation. It’s the only fronting carrier to have an AM Best A+ rating. “We have the single best loss ratio of any fronting carrier and have 200 reinsurers that support us,” Paulsson says. “So that’s a huge vote of confidence and part of the reason we’ve seen such phenomenal growth already in the U.S. market.”
As U.S. commercial insurance gets more specialized and complex, there’s also a new model emerging. Today, highly specialized underwriting firms called managing general agents (MGAs)—which manage the customer relationship—partner with so-called fronting carriers that service the policy and pay the claim. This model is especially common among niche types of insurance, such as aviation, cyber or professional liability.
MS&AD is also making inroads in the U.S. market through its hybrid fronting carrier MS Transverse, which it acquired in 2023. While fronting carriers generally transfer all the risk to other parties such as reinsurers and capital market investors, a hybrid carrier like MS Transverse retains some of it.
“We’re ultimately responsible for making sure the client has a good experience,” says Dave Paulsson, CEO of MS Transverse. “But we’re also responsible for that experience in the eyes of regulators, the government and the industry.”
When MS Transverse was founded in 2018, there were very few fronting carriers in the U.S., and only 5% of commercial insurance policies were issued by MGAs, Paulsson says. Today, about half are. This shift reflects the need for highly specialized underwriting skills that the 25 MGAs it partners with today possess.
Serving
a Growing Need
While the two U.S. subsidiaries operate in different segments of the U.S. insurance market, they complement each other within MS&AD’s broader strategy. MSIG USA mostly focuses on direct relationships with corporations and brokers, while MS Transverse works with MGA partners building specialized insurance programs.
MS&AD sees a significant opportunity in the U.S. thanks to having multiple channels for growth as corporate risks evolve. It sees the U.S. as a priority growth market for expansion, building off its 350-year heritage. “We’re not here to chase a market cycle,” McKenna says. “We’re here to build trust and relationships that give our clients and broker partners confidence we’ll be there for the long term.”
Building Toward
the Future
Find out how MS&AD’s MSIG USA and MS Transverse are helping U.S. companies manage complex risks.
LEARN MORE
— Peter McKenna, CEO, MSIG USA
We’re not here to chase a market cycle. We’re here to build trust and relationships that give our clients and broker partners confidence we’ll be there for the long term.
This content was created by Custom Content from WSJ, a unit of The Wall Street Journal Advertising Department.
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— dave paulsson, ceo, ms transverse
We’re ultimately responsible for making sure the client has a good experience.
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