PPP in Japan's public assets: a near USD 1 billion annual insurance opportunity

We estimate that the increasing use of public private partnerships to run Japan's public asset projects, including infrastructure, will present an additional USD 1 billion premium opportunity for P&C insurers in the years to come.

Key takeaways

• Japan stock of public assets is estimated to be JPY 693 trillion.

• GDP growth has lagged rate of increase in fixed asset investments, pointing to ineffective spending.

• Public-private partnerships (PPP) bring operational and financing efficiencies to infrastructure projects, and ease pressure on government coffers.

• The government targets JPY 21 trillion of PPP projects from 2013 to 2023. We estimate that PPP value still to be fulfilled as of 2018 will generate USD 0.9 billion in new insurance premiums annually.

• This will be across property, liability, business interruption and D&O insurance.

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