Flux-reversal machine (FRM) is cost effective and suitable for mass production due to its simple structure. However, there is a notable permanent magnet flux leakage which deteriorates the performance. To compensate this drawback with a design method, an Inset-Permanent-Magnet-Type FRM (ITFRM) has been proposed. The ITFRM has permanent magnets perpendicular to the stator teeth surface, and thus, is much more difficult to demagnetize. In this paper, we deal with the iron losses and irreversible permanent magnet demagnetization characteristics of the ITFRM according to various design variables and driving conditions. To analyze the characteristics, a two-dimensional finite-element method (2D-FEM) considering nonlinear analysis of permanent magnets is used. As a result, we propose the design variables that have the largest effects on the iron losses and irreversible magnet demagnetization.