Japanese Life Insurance Segment to Reach USD 489.55 Billion in 2016, Forecasts Timetric

22 Apr 2013 • by Natalie Aster

The Japanese life insurance segment is considered the second-largest life insurance segment in the world behind the US in 2011. The Japanese life insurance segment grew at a CAGR of 4% during the review period (2007?2001) due to an aging population and a growth in the volume of single-person households. Japan’s aging population drove consumer attention towards post-retirement savings. This is expected to become a key driver for the segment over the forecast period. Overall, the Japanese life insurance segment is expected to expand at a CAGR of 4.5% over the forecast period (2012-2016).

According to the report “Life Insurance in Japan, Key Trends and Opportunities to 2016” by Timetric, life insurance in Japan is predominantly distributed through the agency and bancassurance channels. Agencies accounted for a market share of 58.8%, whereas bancassurance registered a share of 27% in 2011. The value of the Japanese life insurance segment grew during the review period in the presence of a large aging population. Furthermore, the segment is expected to reach a projected value of JPY36.68 trillion (US$489.55 billion) in 2016 due to an anticipated growth in levels of disposable income.

Report Details:

Life Insurance in Japan, Key Trends and Opportunities to 2016
Published: October, 2012
Pages: 229
Price: US$ 1,950.00

During the review period the volume of sales representatives in the Japanese life insurance segment registered a decline until 2007 when it increased, a situation which is anticipated to continue over the forecast period. The number of sales representative, which was declined from 400,000 in 1990 to 200,000 in 2007, recorded growth during 2007–2010. The total number of sales representatives reached 300,000 in 2010 and is expected to help solve problems such as the non-payment of claims and support the overall growth of the segment.

Japan’s aging population is expected to notably contribute to the growth of country’s life insurance segment over the forecast period. The older population has a tendency to purchase more life insurance products than the younger population as they plan for their retirement. The average life expectancy at birth in Japan was 82.02 years in 2007, which is expected to reach 83.91 in 2012. Those aged 65+ accounted for 23.1% of the total population in 2011 and this, coupled with a rise in the number of single-person households to 16 million, is expected to positively affect the country’s life insurance segment. Policies such as individual life, pension and term life are expected to grow at higher growth rates than other life insurance products during this time.

A growth in the popularity of bancassurance has seen it emerge as the second-largest distribution channel in the Japanese life insurance segment during the review period. The market share of the agencies channel declined from 65.3% in 2007 to 58.8% in 2011 and is anticipated to decline further to reach 53.3% in 2016. However, the bancassurance channel’s market share registered an increase from 22% in 2007 to 27% in 2011, and is expected to reach 31% in 2016. This growth was due to the entry of foreign companies, who prefer the channel due to its relatively low commission costs.

More information can be found in the report “Life Insurance in Japan, Key Trends and Opportunities to 2016” by Timetric.

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