Insurance Industry Trends in Japan, Part 1: Responses to a Changing Competitive Landscape

by Eiichiro Yanagawa, April 30, 2014
Industry Trends
Asia-Pacific

Abstract

In Japan, large insurers have competed through cost leadership. Niche operators and entrants have focused on differentiation. Meanwhile, strategies that have emphasized growth through mergers, acquisitions, and alliances have resulted in an extremely concentrated market. Against this backdrop, insurer sales channels have evolved, but passively.

In the report Japan Insurance Industry Trends: Part 1: Responses to a Changing Competitive Landscape, Celent focuses on the diversification of sales channels and examines factors that will prove integral to successful initiatives. After providing a bird’s eye view of Japan’s position in the global and Asia-Pacific insurance markets, the report examines the growth potential of the life and nonlife insurance sectors and the evolution of insurance products and channels. We then consider related changes in the business environment, competitive pressures, and business strategies.

“Japan’s insurance market is no longer a place where conventional business models will easily translate into a competitive advantage. We are seeing a decoupling of product creation and sales. It will be imperative for market players to forge new business partnerships,” says Eiichiro Yanagawa, Senior Analyst with Celent’s Asian Financial Services group and author of the report.

This report analyzes change in competitive conditions in Japan’s insurance industry and insurer responses through the lens of market changes, competitive pressures, and growth strategies.

Part 2 will zero in on the conspicuous diversification of insurance sales channels, analyzing the economic environment, competitive relationships, and system infrastructure changes underpinning this development, while considering how these channels will develop.

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
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Japan’s Insurance Industry in a Global Context

2

 

Global Market

2

 

Asia-Pacific Insurance Market

4

Insurance Industry Trends

7

 

Life

7

 

Nonlife

14

Responses to a Changing Competitive Environment

22

 

Changes to the Competitive Landscape

22

 

The Evolution of Strategies and Channel Diversification

24

Toward Part 2

29

Leveraging Celent’s Expertise

30

 

Support for Financial Institutions

30

 

Support for Vendors

30

Related Celent Research

31

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