BPL opens Tokyo office: The demand for CPRI in Japan

The credit and political risk landscape has, in the past year, been driven by significant fluctuations in geopolitics and trade, whether in tariff wars or actual wars, while technological developments proceed uninterrupted.

But as risks rise, so too do opportunities for insurance brokers to innovate and expand into new markets, which is why the aggregate capacity of credit and political risk insurance (CPRI) has seen consistent growth in the past decade. 

BPL, the UK-headquartered broker which focuses exclusively on CPRI, last month announced its expansion into Japan. The market holds a distinctly local risk profile, but a complicated global threat landscape: after cybersecurities, Japanese organisations voted that supply chain or distribution failure was their most pressing risk.

Trade Finance Global (TFG) heard from Kenichi “Ken” Iwakura, who heads up the new subsidiary, to explore what is driving demand for CPRI in Japan, how financial institutions (FIs) are evolving their approach to risk, and why now marks an inflexion point for the market.

Jyodh Bilan (JB): Throughout your career, you’ve had the opportunity to work across many of Asia’s key markets, such as Hong Kong, Singapore, and Japan. How have you seen the risk profile across Japan, and perhaps even more broadly across Asia, develop?

Ken Iwakura (KI): Overall, the risk profile has been steady in the markets I’ve experienced. However, in the last five years, I’ve seen a gradual change in appetite towards corporates in mainland China and in Japan. 

Mainland China has been the growth engine of the world post the 2008 Financial Crisis, but growth will not continue forever; China is now contending with an ageing society and matured economy. 

In contrast, Japan has already gone through what China is now experiencing: the “lost decades” of deflation, negative interest rates, and zero growth. At last, as Japanese Prime Minister Sanae Takaichi commented during her visit to Washington, DC, in March 2026, “Japan is back”. The country is enjoying stable economic expansion, wage increases, inflation and a positive view towards rising interest rates. Many corporates, both international and Japanese, are looking into further expansion into Japan.

JB: Compared with BPL’s incumbent markets, such as Europe and the Americas, what opportunities present themselves uniquely in Japan?

KI: The opportunity we see in Japan is gradual growth in both demand and supply towards credit and political risk insurance (CPRI). Compared to the markets in which BPL is active – Europe, the US, and Asia-Pacific (APAC) – Japan is still a small and developing market, but has shown growing awareness and interest in CPRI. As a specialist CPRI insurance broker, we are keen to enter and develop the Japanese market.

JB: Financial institution (FI) risk appetite has evolved significantly over recent years. How do you see FI risk appetite evolving in Japan, across both short-term trade and long-term project finance, especially given early Basel adoption?

KI: Excluding some major globally systemically important banks (G-SIBs), Japan’s FI sector has not been at the forefront of transforming business models, given that the regulator’s phased approach to Basel III means it has not been fully rolled out. These final reforms, however, will be a significant product driver as more banks in the region look to ready themselves ahead of the full implementation date. 

There is also growing demand from banks for CPRI stemming from general risk management initiatives, alongside a continued focus on achieving adequate profitability, particularly in an environment where non-yen funding costs have increased.      

Beyond this, there is also growing awareness of how credit insurance can be used as a distribution tool – another principal application which is relied on by FIs in Europe and the rest of APAC to enable and accelerate lending. In short, it is about striking the right balance between risk and return, and we believe CPRI is an effective tool to support FIs, especially in new markets or for longer-term transactions where counterparty risk may fluctuate.

JB: You expressed an excitement to enter the Japanese CPRI market “at a time of growing demand”. Where have BPL’s activities been focused in APAC historically?

KI: In APAC, we have been active in our Hong Kong and Singapore offices for 15 and 14 years, respectively, two of the region’s major financial centres. We have supported international financial institutions by providing CPRI solutions, while also following our clients’ activities across the region wherever they operate. 

In Japan, we see the market evolving with the regulator implementing the final Basel III reforms by 2028 on a phased basis. While initially focused on internationally active banks, the second phase is now more broadly applicable to domestic institutions. There is increased awareness among Japanese FIs operating globally of the benefits of CPRI, which is gradually developing local demand and supply. We see this as an opportunity for a specialist CPRI broker to enter the market and help broaden CPRI adoption.

JB: Which Japanese trade sectors are most affected by geopolitics, whether that’s rising energy costs, tariffs, or domestic demographics? 

KI: The energy sector is definitely the most affected by geopolitics in Japan, relying heavily on imports and dealing with specific areas in the world. 

Japan has been heavily investing in the renewable energy sector, but with rising costs of offshore wind and concerns around solar panels in Japan, the pace of expansion of renewable power is expected to slow down. That leads to a continuation of reliance on fossil fuels, oil, and gas, which are vulnerable to geopolitical events. 

Japan has historically relied on imports of energy, and with a coordinated effort between the public and private sectors, has provided financing for the development of these projects. Again, CPRI has played, and will continue to play a role in supporting and enhancing the financing of these energy security projects and trade flows.

JB: What role can CPRI play in the Japanese market to alleviate a persistent trade deficit, compounded by global volatility?

KI: By helping FIs and corporates build a deeper understanding of new markets and counterparties, CPRI can act as a catalyst for expanding Japanese trade and exports. In markets where Japanese businesses may not yet have an established track record, such as parts of Africa, CPRI can provide the confidence to enter, structure and scale transactions, supporting more consistent capital flows. 

Complementing and collaborating with public agencies (such as NEXI, the Japanese export credit agency (ECA)) creates a framework where risk is better understood and shared, enabling Japanese institutions to participate more actively in new geographies while maintaining disciplined risk management.

JB: As global supply chains become more fragmented and regionalised, how is this changing risk in trade flows, particularly for Japanese FIs operating overseas?

KI: As supply chains become more fragmented, the role of local and regional banks is likely to become more important. Historically, trade flows were more one-way, but as Japanese manufacturing has increasingly offshored, there is now a greater need to coordinate with local banks that have a stronger understanding of domestic counterparties. 

For Japanese FIs operating overseas, this can present a challenge given more limited familiarity with local corporate risk. We see an opportunity for banks to participate where they have a clear advantage: Japanese institutions supporting Japanese corporate risk, in cooperation with local banks underwriting local counterparties, creating a more balanced and effective risk-sharing model.

JB: Historically, Japan has had a more relationship and bank-led approach to risk, particularly through government/ public agencies. During your career in banking, you have worked with some of these parties first-hand. Where do you see the role of private insurance growing alongside these traditional structures?

KI: The role of Japanese government-related agencies will not change, but I do see an opportunity for private insurance to play a role in the Japanese market. This is especially the case for smaller, shorter time-frame transactions alongside Japanese private banks, as well as situations where silent participation is required or with relatively smaller “Japan interest”. I also see real scope for CPRI to be used to support the proliferation of newer asset classes and more innovative structures, as it is already being leveraged in more mature CPRI markets.