Bancassurance in Japan: Lessons from Europe and the US

by Catherine Stagg-Macey,  Neil Katkov, PhD, February 29, 2008


Tokyo, Japan 29 February 2008

Bancassurance in Japan: Lessons from Europe

The deregulation of bancassurance in Japan offers many opportunities for growth in an otherwise stagnant market. Banks will capture between 20% and 25% of new business in life products, between 5% and 15% in personal non-life products, and approximately 80% in annuities by 2012. However, the path ahead will not be easy and will require significant investment in people, processes, and technology.

Liberalization of Japans bancassurance market has been one of the largest changes to affect the countrys insurance industry in the past few years. In a new report, , Celent examines the Japanese life and non-life insurance industries against the backdrop of mature bancassurance markets abroad and analyses the critical factors for success.

Insurers interested in understanding the potential of this channel can look toward several global examples. In Europe, supportive regulatory frameworks, well-developed banking networks, simple financial products, and strong relationships with banking advisors have turned bancassurance into a success story. By contrast, the US bancassurance market has performed disappointingly, in large part because participants have targeted sales of profitable products without recognizing the amount of support needed to sell these products at significant volumes. Japan shares traits with both the European and US financial services environments.

"In recent years, insurers in Japan have introduced agent extranets and other technologies in order to automate the sales cycle," says Catherine Stagg-Macey, co-author of the report and senior analyst with Celents Insurance Group. This has given insurers experience with the kinds of technologies that can help them lower distribution costs while maximizing profit margins. "Japanese banks' success in selling annuities would seem to augur well for the future of the bancassurance market now that it has been fully deregulated," adds Neil Katkov, co-author of the report and managing director of Celents Asia Research Group. This report analyses the potential of the new bancassurance market in Japan by considering the structure of the Japanese market and drawing on the experience of this channel in both Europe and the United States. It explores what the Japanese bancassurance market will look like in a few years, in addition to examining best practices insurers can adopt in order to effectively compete in this new channel. The 23-page report contains 4 tables and 13 figures. A table of contents is available online. Members of Celent's Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left.  Non-members should contact for more information.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
Tel: +1 212 345 1366

Europe (London)
Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary 04
Introduction 05
Lessons from Europe and the US 07
The Japanese Insurance Market 12
Projections for Japanese Bancassurance 18
Success Factors for Japanese Insurers 21
Conclusions 23


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