Life insurance - Japan

Japan

The Life insurance market market in Japan is projected to reach a market size (gross written premium) of €227.80bn in 2024.
In the same year, the average spending per capita in the Life insurance market market is expected to amount to €1.86k.
The gross written premium is forecasted to show an annual growth rate (CAGR 2024-2028) of -2.74%, resulting in a market volume of €203.80bn by 2028.
When comparing globally, the United States is expected to generate the highest gross written premium of €1,179.0bn in 2024.
Japan's life insurance market is experiencing a surge in demand due to the country's aging population and increasing awareness of the need for financial protection.

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Analyst Opinion

Over the past decade, the Life insurance market in Japan has witnessed a significant transformation, reflecting changing consumer behaviors and economic conditions.

Customer preferences: In Japan, customers have shown a growing interest in life insurance products that offer not only financial protection but also investment opportunities. This shift in preferences can be attributed to the aging population and the need for retirement planning. Additionally, there is a rising demand for digital insurance solutions among tech-savvy consumers.

Trends in the market: One prominent trend in the Japanese life insurance market is the increasing popularity of hybrid insurance products that combine traditional life coverage with savings or investment components. This trend aligns with the customer preference for holistic financial planning and long-term wealth accumulation. Moreover, there is a noticeable surge in the adoption of ESG (Environmental, Social, and Governance) principles in insurance products, reflecting a broader global trend towards sustainable investing.

Local special circumstances: Japan's unique demographic landscape, characterized by a rapidly aging population and low birth rates, has a profound impact on the life insurance market. Insurers are facing the challenge of providing retirement solutions to a growing number of elderly policyholders while also appealing to younger generations. This demographic shift has led to the development of innovative insurance products tailored to different age groups and financial needs.

Underlying macroeconomic factors: The prolonged low-interest-rate environment in Japan has compelled life insurance companies to adjust their product offerings and investment strategies. Insurers are exploring alternative investment options to generate returns in a low-yield market, driving innovation in product design and risk management practices. Additionally, regulatory reforms aimed at enhancing consumer protection and transparency have reshaped the competitive landscape of the life insurance sector in Japan.

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.