Gen. insurance market to grow 3%

The general insurance market in Japan will grow at a compound annual growth rate (CAGR) of 3.0 percent from JPY11,155.4 billion (USD101.6 billion) in 2021 to JPY12,920.7 billion (USD133.1 billion) in 2026, in terms of gross written premiums (GWP), driven by a rise in demand for commercial insurance lines, forecasts GlobalData, a leading data and analytics company.

According to GlobalData, increased frequency of Natural-Catastrophic (Nat-Cat) events, cyber-attacks, and geopolitical risks will drive demand for commercial insurance lines such as property and liability insurance.

Shabbir Ansari, senior insurance analyst at GlobalData, commented: “The Japanese general insurance industry is expected to grow by 1.1 percent after registering a slower growth of 0.4 percent in 2021. The slow growth can be primarily attributed to a decline in motor insurance which accounts for over 50 percent of general insurance premiums. The general insurance industry is expected to gain momentum from 2023 onwards supported by growth in all major insurance lines.”

Motor insurance is the leading insurance line in Japan’s general insurance segment, accounting for a 50.5 percent share, in terms of GWP in 2021. It registered a decline in premium since the onset of the Covid-19 pandemic as frequent lockdowns impacted vehicle sales. This trend is expected to continue in 2022 as global automobile chip shortage and rising inflation will impact vehicle sales. The segment is expected to witness a gradual recovery from 2023.

Property insurance was the second largest segment, accounting for a 25.5 percent share in terms of GWP in 2021. Japan is prone to frequent Nat-Cat events like earthquakes and volcanic eruptions. In February 2021, an earthquake in Fukushima caused an insured loss of more than USD2.5 billion. The high frequency of Nat-Cat events will support the growth of property insurance which is forecasted to grow at a CAGR of 4.9 percent over 2021-26.