Japan’s Insurance Market Is Bigger Than China’s. It’s Also Nearly Impossible to Enter From Singapore.

Norbert Gehrke’s path into being one of the most-followed observers of Japanese fintech ran through two decades of institutional capital markets technology — building front-to-back trading infrastructure at Goldman and Barclays, then consulting. When he returned to Japan in 2017, he took a strategy role inside an insurance company, which gave him a close look at the industry from the inside. The cultural mismatch was instructive rather than frustrating: capital markets runs on short-term, quarter-by-quarter results; insurance runs on a much longer tail, and the fit, in his words, “wasn’t really great anymore.”

He’s since built a portfolio career around Japan’s fintech and insurtech ecosystem rather than a single corporate seat: he founded the Tokyo FinTech Meetup in 2017 (now roughly 3,500 members), writes a weekly LinkedIn newsletter with over 8,500 subscribers covering Japanese finance and fintech broadly, and does angel investing and advisory work across the space.

In Episode 116 of InsurTechTalk, Norbert and I covered why Japan’s insurance market outranks China’s, why entering the Japanese market from a Singapore base almost never works, and why Japan’s low official unicorn count is more an artifact of IPO timing than a sign of a weak ecosystem.

About Norbert Gehrke

Norbert Gehrke is a Tokyo-based capital markets technologist turned fintech ecosystem builder and observer. He spent his corporate career at Goldman Sachs and Barclays building institutional trading infrastructure, later moving into a strategy role at an insurance company after returning to Japan in 2017. He founded the Tokyo FinTech Meetup, publishes a widely-read weekly newsletter on Japanese finance and fintech, and is active as an angel investor and advisor across the region’s fintech ecosystem.

The Yen, the Nikkei, and Why the Timing Matters for Foreign Entrants

We recorded during a genuinely notable macro moment: the yen sitting near 150 to the dollar (compared to roughly 100-110 in Norbert’s earlier memory of the market) and the Nikkei at its highest level in 34 years, since the 1989 bubble peak.

• The yen’s near-term move is largely explained by the interest rate differential between Japan and the US — expectations the Bank of Japan would exit its negative rate policy kept shifting against expectations the Fed would cut, and strong US GDP data was pulling the pair back toward 149 at the time of recording
• Norbert’s practical read: if you’re deploying capital into Japan at 150, a reversion toward a 12-month forecast range of 135-140 implies something like a 10% currency gain independent of what the underlying market does — a genuinely attractive setup
• On equities, part of the Nikkei rally is candidly explained by capital exhaustion elsewhere — after a 14-year global bull run, and with China increasingly difficult, money needs somewhere to go, and Japan is one of the few markets large enough to absorb meaningful inflows
• A more structural driver: the Tokyo Stock Exchange has begun publicly naming companies (starting with those trading below a 1.0 price-to-book ratio) that have and haven’t submitted capital-efficiency improvement plans — a genuine governance-accountability push that’s making institutional investors more willing to publicly question underperforming management ahead of AGM season

For a practical example: banks that traded around 0.5-0.6 price-to-book before the rally have moved to roughly 0.7-0.8, reflecting rising rate expectations directly hitting long-depressed interest margins.

Tokyo, Hong Kong, Singapore, Seoul: Choosing an Asia Entry Point

This was the most directly actionable part of the conversation for anyone weighing where to establish an Asia presence.

• Japan is a genuinely enormous, largely closed market — the world’s second-largest insurance market, ahead of China’s — but it’s slow to enter: not English-language-driven, not highly digitized for business formation, and functionally impossible to build credibly from outside the country
• Singapore is the opposite: an entity, bank account, and operational readiness can be assembled in an afternoon through a service provider, and it serves as a natural hub for reaching Southeast Asia’s much larger, younger, faster-growing population (Indonesia alone has roughly 250 million people)
• Norbert’s clear rule: you can run Singapore from Japan, but you cannot run Japan from Singapore. Many foreign companies try the “easy” Singapore-first approach and hope to extend into Japan later — that path routinely fails. Japan requires a genuine local presence and entity to be credible, though the Japanese government now offers real support for foreign businesses establishing a footprint
• Hong Kong functions primarily as a capital-access and fundraising hub now rather than a straightforward market-entry point, complicated by the security law environment; some founders who moved to Singapore have found it “boring” and drifted back, but caution around the broader environment persists
• Seoul shares Japan’s language-barrier challenge for foreign entrants, but Korea is pushing its own startups even more aggressively on the international stage — Norbert noted Korea sent roughly 500 startups to CES versus Japan’s roughly 30, the largest national presence at the show

Global Financial City Tokyo: 25 Years of the Same Slogan

Norbert’s most pointed critique concerned Tokyo’s positioning ambition. He first arrived in Japan in 1997, during the “Big Bang” financial deregulation explicitly branded around making Tokyo a “Global Financial City” on par with London and New York. That same slogan is still in circulation today, essentially unchanged, and — his diagnosis — the hard structural problems (tax policy chief among them) that would actually make Tokyo globally competitive as a financial center haven’t been solved in the intervening quarter-century.

What is genuinely credible: the sheer scale of Japan’s domestic financial market. Its mega-insurers and mega-banks are legitimate global companies, and roughly 50% of Japanese household assets sit in cash — much of it literally under the mattress (called “tansu money,” after the traditional storage chest), a direct legacy of two decades of zero and negative interest rates.

Beyond Tokyo, Norbert was skeptical of other cities replicating the same “Global Financial City” branding (Osaka, Fukuoka) without differentiated substance. Where he sees genuine merit outside Tokyo is in hardware, embedded systems, bioengineering, and quantum computing research clusters built around specific universities — areas that play to Japan’s traditional strengths rather than imitating a financial-hub narrative that isn’t credible at regional scale.

The VC Ecosystem: Roughly 250 Firms, Very Few Doing Volume

Norbert estimated roughly 250 VC firms operate in Japan, based on a community-maintained list — though he flagged the important caveat that mere presence on that list doesn’t indicate actual investment into foreign founders; other researchers have filtered the list specifically for firms with a track record of backing non-Japanese founders.

• Only about three VC firms did 10 or more new (not follow-on) deals into Japanese startups in the prior year — a genuinely small number by US standards
• Capital is shifting into Japan partly as a byproduct of China becoming harder to access, both on public markets and in private financing
• Plug and Play and 500 Global were credited as foundational in shaping the ecosystem, in part simply by introducing American-style open networking events into a culture that traditionally requires formal introductions before a meeting happens at all
• 500 Global’s early investment in Paidy — acquired by PayPal in 2022 for roughly $2.8 billion, Japan’s largest exit — is cited as a genuine proof point for the ecosystem
• The Japanese government’s five-year startup plan, launched in late 2022, has visibly accelerated the number of accelerators and incubators, to the point that Norbert admitted he can no longer track them all — a good problem, in his framing, even if it means capital may currently outpace the number of genuinely fundable startups

MS&AD Ventures and the Insurance-Specific CVC Landscape

On the insurance side specifically, Norbert highlighted two carrier-driven venture efforts:

• Tokio Marine has an active CVC presence
• MS&AD Ventures took the more unusual step of basing its investment team on the US West Coast rather than Tokyo — creating its own challenges connecting investment sourcing back to the parent group’s activities, but also positioning it, in Norbert’s assessment, to make earlier-stage investments than most Japanese corporate venture arms typically do

The Unicorn Count Is Misleading — In Japan’s Favor

This was one of the sharper structural insights in the conversation. Japan’s officially low unicorn count isn’t necessarily a sign of a weak startup ecosystem — it’s an artifact of a genuinely different capital markets structure.

• Because growth capital (Series B and beyond) has historically been scarce in Japan, companies that would have raised a large Series A or B and stayed private in the US instead go public much earlier — often on what was the “Mothers” market and is now the TSE Growth segment
• This means many Japanese companies reach a $1 billion valuation only shortly after going public, rather than while still private — so they never register in a standard “private unicorn” count at all
• Analysts who adjust the definition to include companies reaching a $1 billion valuation within roughly three years of an IPO find Japan’s real unicorn-equivalent count looks considerably less sparse than the headline number suggests

The corollary is a missing “unicorn recycling” effect: because Japan hasn’t produced the multi-billion-dollar private exits common in the US, there’s a smaller cohort of newly-wealthy exited founders reinvesting as angels and fund LPs — a dynamic Norbert sees as slowly changing but still a real gap relative to Silicon Valley’s self-reinforcing capital cycle.

Where the LP Money Actually Comes From

Norbert’s honest assessment: Japan’s venture LP base skews heavily corporate rather than the diversified mix of endowments, family offices, and exited founders common in more mature ecosystems. A meaningful amount of Japanese wealth has historically flowed through Singapore instead (partly, historically, for tax reasons that are shifting under global transparency pressure), and he’s personally evaluating whether an angel syndicate based in Japan is even structurally viable given how governance and fund vehicles typically need to be domiciled outside the country for Asia-wide investment mandates.

Looking South and West: Southeast Asia and India

Norbert’s read on where forward-looking Japanese capital is actually pointed: increasingly toward Southeast Asia as a “secondary home market,” and — more recently — India, which he described as looking like China did roughly 25 years ago, with a large, young, rapidly growing middle class and an obvious multi-decade growth trajectory. He noted candidly that Japanese companies probably should have pursued this regional pivot earlier, and that the shift accelerated over roughly the last five years as US market access became comparatively more complicated.

Advice: Take the International Risk Early

Asked for closing advice, Norbert described himself as more opportunistic than strategic across his own career, but consistent on one point: international relocation — packing up and working somewhere genuinely different — is dramatically easier now than when he first moved abroad in 1997 without a mobile phone and with international calls costing several dollars a minute. His recommendation, particularly before someone takes on major life obligations, is to take that risk while it’s available: the cross-cultural experience compounds into judgment and creativity that pays off across an entire career, not just the specific international stint.

On reading, he pointed to Plunder, a 2023 book examining how private equity is increasingly capturing life insurance balance sheets in the US — reinvesting insurance capital into PE funds — a dynamic later validated at a systemic level when the IMF issued a global financial stability note on private equity and life insurance the following December. Norbert noted Asia, including Japan’s major life insurers, has already seen some book-of-business acquisitions along similar lines, and expects regulatory attention (from Japan’s FSA specifically) if that activity scales further.

Key Takeaways

• Japan is the world’s second-largest insurance market, larger than China’s, but requires genuine local entity presence — it cannot be credibly entered from a Singapore base the way Southeast Asia can
• The yen’s position near historic lows against the dollar made 2024 an attractive entry window independent of underlying market performance, per Norbert’s rate-differential analysis
• Tokyo’s “Global Financial City” positioning has been repeated for 25 years without resolving the structural issues (tax policy chief among them) that would make it genuinely competitive with London or New York
• Japan’s low official unicorn count is substantially a function of earlier, more common IPOs rather than a weaker startup ecosystem — many companies cross $1 billion in valuation shortly after going public rather than while still private
• The absence of large private exits has limited the “founder-turned-angel-investor” recycling effect that fuels ecosystems like Silicon Valley’s
• MS&AD Ventures basing its investment team on the US West Coast, rather than Tokyo, is a genuinely unusual structural choice among Japanese insurance CVCs
• Japanese corporate and investor attention is increasingly shifting toward Southeast Asia and India as growth markets, a pivot that arguably should have happened earlier