Changing Life Insurance in Japan - Thought Leadership - Towers Perrin

For years, Japan has earned respect as a giant in global insurance markets. It's the second largest market in the world, after the U.S. According to Swiss Re, total premium income in 2006 reached $363 billion, representing approximately one-sixth of total world life insurance premium income. Japanese life insurers are among the largest in the world, including the largest of all, Japan Post Insurance.

But time has not kept Japan immune from change. Premium income has slipped after a period of steady growth in the 1990s, reflecting the existing high rate of penetration of life insurance products in an economy that has seen only mild economic growth over a number of years. From 1998 to 2001, seven life insurers in Japan either became insolvent or entered rehabilitation as a result of reduced asset values and high-interest-rate guarantees on products that could not be supported by current investment yields. Six of these failures occurred in an eventful 12-month period in 2000 and 2001 (see Emphasis 2001/3, "Why Some Japanese Insurers Are Failing").

These and other headline statistics mask the wide range of developments that have taken place within the industry since the start of the decade. They don't tell the story of the shift in the profile of providers, products and distribution, as well as in the ranks of the winners and losers.

http://www.towersperrin.com/tp/showdctmdoc.jsp?url=master_brand_2/global...