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Insurance industry in Japan - statistics and facts

Japan is one of the largest and most mature insurance markets in the world. The East Asian country records some of the highest life and non-life direct premiums written globally. Life insurance dominates the insurance market, fueled by a high life insurance ownership among households.

Life insurances dominate the Japanese market

The insurance market in general can be divided into life insurance and non-life insurance, with the latter also being referred to as general insurance. Life insurance makes up the larger part of the insurance market in the case of Japan, with non-life insurance accounting for less than one-third of total gross premiums written.
Nippon Life, Dai-ichi Life, and Meiji Yasuda represent the leading life insurance groups in Japan. Some of Japan’s life insurers, such as Japan Post Insurance and Nippon Life Insurance, are among the largest insurance companies worldwide, based on revenue. The non-life insurance market is dominated by three insurance groups comprising Tokio Marine Holdings, Sompo Holdings, and MS&AD Insurance Group Holdings.

Development in recent decades

While Japan is home to some of the world’s largest insurance companies, the industry has been facing various challenges since the 1990s. The economic slump following the Bubble Economy of the late 1980s led to a decline of the insurance penetration rate, which until then had been the highest in the world. Life insurance premiums decreased during this time, while asset portfolios lost in value. During these years, the government liberalized the financial sector, which led to an increasing presence of foreign insurers and a restructuring of pricing regimes. As a result, insurance agencies, which are not bound to one specific company and can therefore act like brokers, gained in importance as a sales channel. The deregulation in general resulted in fiercer competition and a phase of consolidation. More recently, low interest rates and a declining population have posed further challenges for insurance companies. Facing a lacking growth potential in their domestic market, many companies decided to expand to overseas markets, increasingly engaging in M&A activities.

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