Japan Car Insurance Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)

Japan Car Insurance Market Analysis

The Japan Car Insurance Market size in terms of direct written premiums value is expected to grow from USD 20.31 billion in 2024 to USD 26.18 billion by 2029, at a CAGR of 5.21% during the forecast period (2024-2029).

Under the law of Japan, all registered vehicles must be covered with compulsory automobile liability insurance to protect third parties from accidental injuries. These compulsory car insurances do not exist with coverage to the insured, property damage to third parties, and repair or replacement for the damaged vehicles, creating a market gap in car insurance products and providing an opportunity for insurance companies to launch their customized car insurance products. Post-COVID-19, net premiums written for compulsory automobile liability insurance in Japan observed a decline last year and increasing premiums of alternative car insurance products.

Unit sales volume of new passenger cars in Japan is observing an increase, with SUVs, Mini cars, and medium cars occupying a significant share of more than 60% in the overall sales, resulting in car insurance providers focusing on specific segments of cars on the other hand sales of used passenger cars are observing a decline and impacting their insurance business. Rising car safety norms and fewer car accidents in Japan are leading to declining insurance premiums on car insurance making it convenient for car owners to purchase from a varied segment of available car insurance products.

Rising technological and digital innovations are leading car insurance products in a new direction. Insurtech penetration in Japan Non-life insurance industry is observing a continuous rise, leading to an increasing number of car insurance providers coming up with online car insurance services to buy, renew, and claim car insurance. Telematics or usage-based insurance, which makes the insurance company calculate premium rates based on data generated from driving behavior, minimizes the asymmetric information and moral hazard issues between the buyers and insurers. Japan's telematics insurance market size has observed a continuous rise over the years and is expected to create rapid growth in Japan's car insurance market.

Japan Car Insurance Market Trends

Rising Gross Written Premium with Declining Insurance Premium Rates

Japan Car Insurance Industry Segmentation

Car insurance is a contract between the car owner and the insurance company where the car owner agrees to pay a fixed premium rate over a period for protection against financial loss in the event of any damage or loss to the car. Rising digital insurance and product innovations in the market are making car insurance products more inclusive among car owners.

The study gives a brief description of the Japanese car insurance market and includes details on car insurance premiums, investment by car insurance companies, and the launch of new car insurance products.

The Japanese car insurance market is segmented by coverage, by application, and by distribution channel. By coverage, the market is segmented into third-party liability coverage and collision/comprehensive/other optional coverage. By application, the market is segmented into personal vehicles and commercial vehicles. By distribution channel, the market is segmented into direct sales, individual agents, brokers, banks, online, and other distribution channels. 

The report also covers the market sizes and forecasts for the Japan car insurance market in value (USD) for all the above segments.