Insurances - Japan

Japan

The Insurances market in Japan is expected to see a significant growth in the coming years.
By 2024, the market size, measured by gross written premium, is projected to reach an impressive €311.80bn.
Within the market, Life insurances dominates with a projected market volume of €227.80bn in 2024.
In terms of average spending per capita, the Japanese population is estimated to allocate around €2.54k towards insurance in 2024.
This showcases the significance of the insurance industry in the country and the importance the Japanese people place on protecting their assets and well-being.
When compared globally, it is noteworthy that the United States holds the highest nominal value in the insurance market.
In 2024, the United States is expected to reach a gross written premium of €4,304.0bn.
This highlights the size and scale of the insurance industry the United States.
Looking ahead, the gross written premium in Japan is projected to grow at an annual growth rate of -1.64% between 2024 and 2028.
This growth is anticipated to result in a market volume of €291.80bn by 2028.
Despite this growth, it is important to note that the United States is still expected to generate the highest gross written premium globally in 2024, reaching €4,304.0bn.
Japan's insurance market is experiencing a surge in demand for cyber insurance due to the rising threat of cyberattacks in the country.

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Analyst Opinion

In Japan, the Insurances market is experiencing a shift towards digitalization and innovation, driven by changing customer preferences and local special circumstances.

Customer preferences: Customers in Japan are increasingly seeking personalized insurance products that cater to their specific needs and lifestyles. With a growing emphasis on convenience and efficiency, there is a rising demand for digital insurance services that offer quick and seamless user experiences. Moreover, customers are placing greater importance on transparency and trustworthiness in insurance providers, leading to a push for clearer communication and fairer pricing strategies.

Trends in the market: One of the notable trends in the Japanese insurance market is the rise of Insurtech companies that are leveraging technology to offer innovative solutions such as AI-driven risk assessment, blockchain-based smart contracts, and mobile claim processing. These technological advancements are not only streamlining operations for insurance companies but also enhancing the overall customer experience. Additionally, there is a growing interest in niche insurance products, such as cyber insurance and parametric insurance, reflecting the evolving risk landscape in Japan.

Local special circumstances: Japan's aging population and low birth rate have significant implications for the insurance market. As the demographic profile shifts towards an older population, there is a greater need for retirement planning and long-term care insurance products. Insurance companies in Japan are adapting their offerings to address the specific needs of an aging society, including products that cover healthcare expenses and provide financial security in old age.

Underlying macroeconomic factors: The economic landscape in Japan, characterized by low interest rates and slow but steady growth, is influencing the insurance market dynamics. Insurers are facing challenges in generating investment returns in a low-yield environment, prompting them to explore alternative investment strategies. Moreover, regulatory reforms and changing government policies are shaping the competitive landscape and driving consolidation within the insurance industry. Overall, the Insurances market in Japan is undergoing a period of transformation, driven by changing customer expectations, technological advancements, demographic shifts, and macroeconomic factors.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.