Japan Insurance Report Q1 2013
Business Monitor International, November 2012, Pages: 69
The Japan Insurance Report considers the prospects for both life and non-life (property & casualty and health) insurers. Both segments differ quite markedly from their counterparts in other countries that are surveyed by BMI. In part because of mega-mergers (particularly in the non-life segment), companies have enormous scale by any standards. Insurers are an integral part of the peculiar financial sector of Japan, in which accumulated savings are enormous and are often channelled to the government and its agencies through Japanese government bonds (JGBs) or other securities.
Perhaps most importantly, the markets are orderly. Notwithstanding that some major lines (such as the auto-related business written by many of the major non-life companies) there is an absence of cutthroat competition. Barriers to entry to foreign groups are high. However, they are not insurmountable.
Particular foreign groups with the absolute size, capital strength, brands, expertise in developing annuity products (especially) and long-established distribution relationships continue to flourish in Japan.
As of late 2012, much of the latest newsflow has been uninspiring. The stagnation of the Japanese economy, the strength of the yen, and peculiar demographics have had adverse effects on insurance companies’ finances. For the non-life companies, the losses arising from the floods in Thailand in late 2011 appear to have produced even larger claims than the earthquake and tsunami of March last year (in relation to which, much of the costs were borne by the government, Japan Earthquake Reinsurance,
and the global reinsurance industry).
However, there are a number of clear positives that are evident in late 2012. Rates are firming in some non-life lines. Major non-life companies are collaborating with life companies to extend their reach.
There is product innovation. Substantial benefits are still being realised from mega-mergers. Both non-life and life companies are looking at opportunities in foreign markets – and, often – in emerging markets that are already quite large.
Over the last quarter, BMI has made the following changes:
- Recent announcements from major insurers and ratings agencies are included.
- Projections include the latest wave of data which points to continued stagnation in Japan’s economy.
Executive Summary 5
Table: Total Premiums, 2010-2017 5
Key Insights And Key Risks 5
SWOT Analysis 7
Japan Insurance Industry SWOT 7
Japan Political SWOT 9
Japan Economic SWOT 10
Japan Business Environment SWOT 11
Life Sector Overview 12
Developed States Life Sector Overview 12
Table: Developed States Life Premiums 2010-2017 12
Japan Life Sector Update 13
Life Industry Forecast Scenario 16
Table: Life Premiums, 2010-2017 16
Industry Forecast Scenario 17
Growth Drivers And Risk Management Projections 17
Population 17
Table: Insurance Key Drivers, Demographics, 2010-2017 17
Non-Life Sector Overview 19
Developed States Non-Life Sector Overview 19
Table: Developed States Non-Life Premiums, 2010-2017 (US$mn) 19
Japan Non-Life Sector Update 21
Non-Life Forecast Scenario 23
Table: Non-Life Premiums, 2010-2017 23
Growth Drivers And Risk Management Projections 24
Macroeconomic Outlook 24
Table: Japan – Economic Activity, 2011-2016 27
Table: Japan Macroeconomic Data And Forecasts 2010-2017 27
Political Stability Outlook 28
Table: Asia Pacific Regional Security Ratings 30
Healthcare 30
Epidemiology 31
Table: Japan Insurance Key Drivers – Disease Adjusted Life Years, 2010-2017 32
Motor 33
Insurance Risk/Reward Ratings 35
Table: Japan’s Insurance Risk/Reward Ratings 35
Table: Developed States Insurance Risk/Reward Ratings 36
Competitive Landscape 37
Major Players In Japan’s Insurance Sector 40
Life Insurance 41
Non-Life Insurance 43
Company Profiles 45
Japan Post Insurance 45
Nippon Life (Nissay) 48
NKSJ Holdings 51
Prudential Financial 54
MetLife 58
Country Snapshot 61
Table: Japan's Population By Age Group, 1990-2020 ('000) 62
Table: Japan's Population By Age Group, 1990-2020 (% of total) 63
Table: Japan's Key Population Ratios, 1990-2020 64
Table: Japan's Rural And Urban Population, 1990-2020 64
BMI Methodology 65
Insurance Risk/Reward Ratings 66
Table: Insurance Business Environment Indicators And Rationale 67
Table: Weighting Of Indicators 68
Japan Post Insurance
Nippon Life (Nissay)
NKSJ Holdings
Prudential Financial
MetLife
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