Market Overview

The worsening economic environment, including the prolonged COVID-19 crisis and soaring prices, has increased the need for reviewing life insurance policies and for purchasing new policies. Against the backdrop of heavy burden due to rising prices and stealth tax rise, FY2022 saw a rise in client demand to save money and build assets by reviewing life insurance policies.

Inquiries for medical insurance with more coverage at lower premiums, single-payment whole life insurance, and foreign currency-denominated life insurance that is attracting attention against the backdrop of the interest hike in the United States, are increasing at insurance brokerage shop operators. As the application for these insurances increased, the size of the insurance brokerage shop market for FY2022 is expected to rise by 4.8% from the previous fiscal year to reach 200,300 million yen.

Despite the return of people’ flow to pre-pandemic level, considering the increasing demand for convenience of online consultation/application, it is unlikely for the insurance brokerage shops to see substantial growth in FY2023. Besides, the length of time it may take for insurance brokerage shops to engage customers may adversely affect the market growth.

On the other hand, the government's "Asset Income Doubling Plan" may increase the number of customers interested in asset building with insurance products.

Considering both factors, the market size for FT2023 is expected to grow by 3.1% from the prior fiscal year to 206,400 million yen, and the number of new insurance policies to be sold will reach 2.04 million. The market foresees recovery to pre-pandemic level. 

Noteworthy Topics

Expansion of Online Customer Engagements

Deployment of an online consultation service by insurance brokerage shops is propelled by the COVID-19 crisis. As of August 2023, of 264 insurance-shop operating companies, 92 companies (34.8%) have introduced the online consultation service. The deployment rate has increased by about 5 percentage points from the last 2022 survey, which was then around 30%.

Meanwhile, conventional life-insurance companies are adopting a new sales style. Their agents utilizing online consulting service and in-person sales, as opposed to focusing singularly on their traditional face-to-face sales approach. The digitization in recent years and the pandemic impacts have been boosting the attempts to reinforce customer engagement in a hybrid style.

Future Outlook

The domestic insurance market is viewed as a diminishing industry as a result of a slew of socioeconomic challenges such as low birthrates, elderly populations, and population decrease.

However, the environment surrounding the industry has become chaotic. On the one hand, there is an increase in the number of customers interested in asset building with insurances stemming from the government's "Asset Income Doubling Plan" and in preparing financially for “the risk of extended longevity”, but on the other hand, there is a major trend of tightening household expenses including insurance due to a rise of life uncertainties, such as soaring product prices and tax hikes.

There is room for growth for both ends of insurance, the insurers and insurance agencies/insurance brokerage shops, if they work on incorporating customer needs associated with “the risk of extended longevity & increasing health consciousness” and “asset building”, and on engaging new customer segments such as tech-savvy seniors, Gen Z, and those indifferent to insurance. Even though the life insurance coverage in Japan stands high, almost reaching saturation, the business could expand further in the future if such "Blue Ocean" opportunities can be addressed.

Research Outline