Ace on a 'hunt' to buy Japanese firms

Ace Group has revealed its interest in Japanese acquisition targets in a conference call with analysts

According to Bloomberg, the Swiss insurer's chief executive, Evan Greenberg, said in a conference call yesterday that the firm was eyeing potential aquisitions after Japanese insurers took on too much risk.

"We have an operation in Japan, and we're on the hunt there," Greenberg is quoted as saying.

Reinsurance rates rose as much as 60% for earthquake coverage in Japan, and less for other risks, after the earthquake in March 2011, Swiss Re said in June.

Greenberg explained that local companies may have charged too little in an attempt to maintain contracts in their home country.

Japanese insurers were "naïve in their underwriting", Greenberg said on the call with analysts, adding that Ace is "seeing some opportunity, and that may accelerate".

Ace's expansion plan comes as Japanese insurers turn to foreign markets and cutting costs locally to counter declining demand because of the nation's stagnant economy and shrinking population.

The insurer advanced 0.9% to $75.95 in New York yesterday and has gained 8.3% this year.