“We have an operation in Japan, and we’re on the hunt there,” Greenberg said on a conference call yesterday.

Reinsurance rates rose as much as 60 percent for earthquake coverage in Japan, and less for other risks, after the country’s temblor and tsunami in March 2011, Swiss Re Ltd. said in June. Greenberg said 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. “We’re seeing some opportunity and that may accelerate.”

Ace’s expansion plan comes as Japanese insurers are turning to foreign markets and cutting costs locally to counter declining demand because of the nation’s stagnant economy and shrinking population. MS&AD Insurance Group Holdings Inc. (8725), Japan’s biggest casualty insurer, is buying a stake in India’s Max New York Life Insurance Co., while Tokio Marine Holdings Inc. (8766), the second largest, agreed to buy Delphi Financial Group Inc. in its biggest acquisition in three years in December.

Earthquakes, Floods

Reinsurance rates rose in April 1 renewals, which focus on the Asia-Pacific region, after last year’s losses from earthquakes and floods in Japan, Thailand and New Zealand, reinsurance broker Guy Carpenter & Co. said on April 5. About two-thirds of annual property and casualty reinsurance contracts typically come up for renewal in January, with the remainder renewed in April and July.

Ace, which sells both primary coverage and reinsurance, has expanded through acquisitions in Hong Kong, Korea and Malaysia, including the purchase of some Asian units of New York Life Insurance Co. for $425 million. U.S. policy sales increased 0.6 percent in the first quarter, compared with an 8.4 percent jump overseas, the insurer said April 24.

Net income more than tripled to $973 million in the first quarter as catastrophe costs fell, the Zurich-based insurer said. Operating income, which excludes some investment results, was $2.05 a share, beating by 18 cents the average estimate of analysts surveyed by Bloomberg.

The insurer advanced 0.9 percent to $75.95 in New York yesterday and has gained 8.3 percent this year. The 77-company Bloomberg World Insurance Index gained 12 percent since Dec. 31.

To contact the reporter on this story: Zachary Tracer in New York at ztracer1@bloomberg.net

To contact the editor responsible for this story: Dan Kraut at dkraut2@bloomberg.net

http://www.bloomberg.com/news/2012-04-25/ace-on-the-hunt-in-japan-as-greenberg-says-rivals-were-naive.html

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