Insurance Industry Trends in Japan, Part 2: New Sales Channels — Challenges and Solutions

by Eiichiro Yanagawa, May 15, 2014


Japan is in the midst of a demographic transition that has immense implications for the domestic insurance market. With a population that is both shrinking and graying, insurers face a contracting market and need to cater to an aging clientele, trends that are seen prompting reorganization in the market. 

Celent offers three proposals, all of which can be advanced with digital means, to help insurers and insurance technology vendors to thrive in this new era.

  1. Enhance modularization capabilities and decouple product creation from sales.
  2. Enhance capacity to respond socially and locally through differentiation via an omnichannel approach.
  3. Enhance cost-adaptability through self-service, efficiency, and simplification of processing operations.

“Japan’s insurance industry has taken a passive and reactive approach when it comes to sales channel change, acting primarily in response to external factors,” says Eiichiro Yanagawa, Senior Analyst with Celent’s Asian Financial Services group and author of the report. “However, this type of reactive approach is insufficient when it comes to solving the shared challenges faced by Japan’s insurers; a wealth of core issues inherent to the sales channel remain to be resolved.”

For insurers to thrive in the coming era, Celent believes that the below three points will play an integral part in company strategies and stresses the importance of innovation. 

  1. Efficiency of systems.
  2. Enhanced synergy and profitability fueled by diversification of operations.
  3. Making forays into expected growth areas and overseas markets.

This report is the second of two. In Part 1, Celent provided a bird’s eye view of Japan’s position in the global and Asia-Pacific insurance markets before examining the growth potential of the life and nonlife insurance sectors and the evolution of insurance products and channels. We then considered related changes in the business environment, competitive pressures, and business strategies.

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

Table of Contents

Executive Summary


Shared System Promoting Channel Diversification



The Background of Shared Systems



The Advent of Shared Systems



Case Study: e-JIBAI Compulsory Automobile Liability Insurance Shared System


Future of New Channels



Bank Sales Channels



Brick-and-Mortar Insurance Shops



Online Sales


Challenges and Solutions



Core Challenges Inherent in Sales Channels



Fundamental Change of Sales Channels



Impact of a Contracting Market



Capacity to Respond to Change



Responding to Change with Digital Technology


Conclusion: Accelerating Innovation



The Limits of a Reactive Approach



From Sales Channel Diversification to Business Model Diversification



Toward Intentional Innovation



Innovation Portfolio Model


Leveraging Celent’s Expertise



Support for Financial Institutions



Support for Vendors


Related Celent Research


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