The life insurance industry in Japan is projected to grow from JPY28.7 trillion (US$269.2bn) in 2020 to JPY30.7 trillion (US$323.6bn) in 2025, in terms of direct written premium (DWP), according to GlobalData, a leading data and analytics company.

GlobalData has revised Japan’s life insurance forecast in the aftermath of the COVID-19 outbreak. As per the latest data, Japan’s life insurance industry is projected to grow at a compound annual growth rate (CAGR) of 1.4% over 2020-2025, supported by gradual economic recovery.

Shabbir Ansari, Insurance Analyst at GlobalData, comments: “The slower pace of economic recovery due to the resurgence of the COVID-19 pandemic is expected to continue to impact the Japanese life insurance industry in 2021. The industry is expected to decline by 1.7% in 2021 following a 6.9% decline in 2020.”

Life Insurance industry is dominated by individual life insurance that accounted for 76.2% of DWP in 2020. As per the data released by Life Insurance Association of Japan, 4.8 million individual life insurance policies were sold during April to June 2021, an increase of 193% compared to 2.5 million sold during the same period last year.

General annuity accounted for 19.6% of total life insurance DWP in 2020. In Japan, the population aged 100 years and above is expected to reach 232,812 by 2025, making it one of the leading nations in terms of high life expectancy. As a result, insurers are focusing on products offering larger annuity funds by reducing surrender value and death benefits.

Group life insurance accounted for 3.7% of the total life insurance DWP in 2020. The premium for group life policies declined by 7.3% in the second quarter of 2021 compared to the same period in the previous year due to increase in unemployment rate because of the pandemic.

Mr. Ansari concludes: “The life insurance industry in Japan is expected to recover gradually from the second half of 2021 driven by country’s demographic, growing momentum in vaccine rollout and economic revival.”