Japan Insurance Report Q2 2016
BMI View: Home to large numbers of wealthy - and ageing - households that have long valued theadvantages of life insurers' offerings, Japan is a rare example of a life insurance market that is enormous inabsolute terms, well developed by most metrics and still expanding faster than the economy as a whole. It isalso profitable for most of the long-established (and enormous) players, notwithstanding that earnings havebeen crimped by very low interest rates. Conversely, the non-life segment faces headwinds - in particular,contracting volumes for motor insurers, who account for over half of the premiums written in the segment.
Key Updates And Forecasts
We continue to forecast growth in life insurance premiums of around 4% annually through the forecastperiod, notwithstanding that some companies have reported double-digit rises in new business in recentmonths. Growth will be driven by increasing demand for retirement income solutions; the establishedposition of the life insurance industry as a provider of social security in Japan; the low rates of returnavailable from competing investment opportunities; and innovation by life insurers in terms of productdesign, distribution and brand.
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