Japan Property & Casualty Insurance Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Japan Property and Casualty Insurance Market is segmented by Insurance Type (Property, Auto, and Other Insurance Types) and Distribution Channel (Direct, Agents, Banks, and Other Distribution Channels)

Market Snapshot

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Study Period: 2018-2027
Base Year: 2021
CAGR: >4 %

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Market Overview

The insurance market in Japan is one of the world’s largest. Japan's property and casualty insurance market, at JPY 9 trillion in premiums, is the world's fourth-largest. 

Japanese insurers have mobilized rapidly in response to the COVID-19 pandemic. The sudden decrease in interest rates and significant restrictions on people’s movement are necessitating changes to product portfolios, distribution models, and business operations.

The three biggest Japanese P&C insurance businesses' COVID-19 pandemic-related losses for international business in 2020 were fully offset by strong profits from home business. To keep capitalisation robust, MS&AD Insurance Group, Sompo Holdings, and Tokio Marine Holdings (TMH) are anticipated to maintain conservative capital management.

Japanese property and casualty insurers also have very strong sub-limits, which limit the amount of coverage available to cover a specific type of loss. As of November 2021, there are 54 private non-life insurance companies in Japan. There are 30 domestic insurance companies and 20 branches of foreign insurers, and the Society of Lloyd's (Lloyd's). Due to the falling birth rate and the ageing population, the non-life insurance market is shrinking and becoming more competitive.

The domestic market is largely an oligopoly. The three largest insurers hold 85.6% of the market share, while foreign insurers hold only 8%. More non-insurance companies (largely financial services players) are entering the P&C market, which could significantly impact the dominant position of the top P&C insurers. The increase in damage from severe natural disasters in Japan is leading P&C insurers to redefine risk profiles using the most up-to-date technologies. Further, they will look to adopt advanced technologies to reduce the high cost and inefficiency of legacy systems and improve their operational agility.

Scope of the Report

Property insurance and casualty insurance (also known as P&C insurance) are types of coverage that help protect you and the property you own. Casualty insurance means that the policy includes liability coverage to help protect you if you're found legally responsible for an accident that causes injuries to another person or damage to another person's belongings.

A complete background analysis of the Japanese property and casualty market, which includes an assessment of the parental market, emerging trends by segments, and regional markets. Significant changes in market dynamics and market overview are also covered in the report.

The Japan Property and Casualty Insurance Market is segmented by Insurance Type (Property, Auto, and Other Insurance Types) and Distribution Channel (Direct, Agents, Banks, and Other Distribution Channels).

Insurance Type
Property
Auto
Other Insurance Types
Distribution Channel
Direct
Agents
Banks
Other Distribution Channels

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Key Market Trends

Status of Automobile Insurance in Japan

In Japan, automotive insurance (including mandatory automobile liability insurance) accounts for 60% of net premiums. Premiums are calculated using a "grading system" based on the accident histories of policyholders. Auto insurance sales are dominated by agencies. Direct sales are expanding at a rate of roughly 4%.

Motor insurance demand is expected to decline in the long run due to the shrinking population and well developed public transportation system in Japan. The development of autonomous driving technologies will likely expand the demand for product liability insurance, telematics automobile products, as well as cyber protection.

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Status of Property Insurance in Japan

Wind and flooding damage is also covered by fire insurance in Japan. In the fiscal year ending 31 March 2017, fire insurance accounted for 15% of total premium income, making it the second most profitable business line behind auto insurance. However, it is the least profitable of the primary lines of business, and it has been losing money on underwriting for many years. Japanese non-life insurers raised their fire insurance premiums for homes by a national average of 6 to 8% in January 2021. The premium hikes were made in response to a string of natural disasters, such as torrential rains in western Japan and Typhoon Jebi, which caused heavy damage to Kansai International Airport, both in 2018. Insurance premiums are expected to rise mainly in the disaster-hit western areas of the country. Some expect an increase of over 10%, depending on the location and building. Insurance payouts exceeded JPY 1 trillion in 2019 because many houses were damaged in disasters, including by Typhoon Faxai.

Earthquake insurance is a type of insurance that covers only earthquake disasters. It covers damage caused by fire, destruction, burying, or washing away because of an earthquake or volcanic eruption, as well as a tsunami that occurs as a result of either of these events. Buildings for residential use as well as household valuables are covered by Earthquake Insurance. It is attached to fire insurance. Namely, it is a prerequisite to carry fire insurance to carry Earthquake Insurance. Fire insurance policyholders without the Earthquake Insurance can attach it midway through the policy period. The Earthquake Insurance, whose objective is to stabilize the livelihoods of the affected by earthquakes, is established with the government reinsuring massive earthquake damage which exceeds a certain amount of liability that private insurance companies underwrite. The limit is JPY 11.7751 trillion. Combined with the liability sharing for private insurance companies, the limit on total payouts for a single earthquake, etc. sums to JPY 12 trillion.

Japan_Property_and_Casualty_Insurance_Market

Competitive Landscape

The report covers major international players operating in the Japanese property and casualty market. In terms of market share, few of the major players currently dominate the market. However, with technological advancement and product innovation, mid-size to smaller companies are increasing their market presence by securing new contracts and by tapping new markets.

Recent Developments

  • July 2021 - Sompo International Holdings Ltd., a global, Bermuda-based speciality provider of property and casualty insurance and reinsurance, announced the launch of its Sompo Women in Insurance Management (SWIM) program which aims to better prepare young women to assume future leadership roles at Sompo International. The initial program will begin in the United States in collaboration with High Point University located in High Point, North Carolina to ultimately expand the program and approach to additional universities in the U.S. and internationally.
  • July 2021 - Sompo International Holdings Ltd., announced that it's Commercial Property & Casualty (P&C) segment has expanded its global product capabilities with the formation of Sompo Global Risk Solutions (GRS) Asia-Pacific, a new team based in Singapore to serve select industries in the Asian markets through appointed brokers.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Deliverables And Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS AND DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Market Drivers

    3. 4.3 Market Restraints

    4. 4.4 Porter's Five Forces Analysis

      1. 4.4.1 Threat of New Entrants

      2. 4.4.2 Bargaining Power of Buyers/Consumers

      3. 4.4.3 Bargaining Power of Suppliers

      4. 4.4.4 Threat of Substitute Products

      5. 4.4.5 Intensity of Competitive Rivalry

    5. 4.5 Impact of COVID-19 on Industry

  5. 5. MARKET SEGMENTATION

    1. 5.1 Insurance Type

      1. 5.1.1 Property

      2. 5.1.2 Auto

      3. 5.1.3 Other Insurance Types

    2. 5.2 Distribution Channel

      1. 5.2.1 Direct

      2. 5.2.2 Agents

      3. 5.2.3 Banks

      4. 5.2.4 Other Distribution Channels

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Market Concentration Overview

    2. 6.2 Company Profiles

      1. 6.2.1 Tokio Marine & Nichido Fire Insurance Co., Ltd.

      2. 6.2.2 Sompo Holdings Inc.

      3. 6.2.3 Rakuten General Insurance Co., Ltd

      4. 6.2.4 MS&AD Insurance Group Holdings, Inc.

      5. 6.2.5 SAISON Automobile & Fire Insurance Co., Ltd.

      6. 6.2.6 SECOM General Insurance Co., Ltd.

      7. 6.2.7 Hitachi Capital Insurance Corporation.

      8. 6.2.8 Nisshin Fire & Marine Insurance Co., Ltd.

      9. 6.2.9 Kyoei Fire & Marine Insurance Co.,Ltd

      10. 6.2.10 Mitsui Direct General Insurance Co. Ltd.*

    3. *List Not Exhaustive
  7. 7. MARKET OPPORTUNITIES AND FUTURE TRENDS

  8. 8. DISCLAIMER AND ABOUT US

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Frequently Asked Questions

The Japan Property & Casualty Insurance Market market is studied from 2018 - 2027.

The Japan Property & Casualty Insurance Market is growing at a CAGR of >4% over the next 5 years.

MS&AD Insurance Group Holdings, Inc, Tokio Marine & Nichido Fire Insurance Co., Ltd., Sompo Holdings Inc., Rakuten General Insurance Co., Ltd., Nisshin Fire & Marine Insurance Co., Ltd. are the major companies operating in Japan Property & Casualty Insurance Market.

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