Japan Insurance Brokerage Market Valuation is Set to Surpass USD 93.19 Billion by 2032| Astute Analytica

Astute Analytica views Japan as a mature, stable insurance brokerage market driven by its aging population and high-income households. The rapid adoption of InsurTech and digital transformation is reshaping the industry, offering new growth opportunities despite traditional brokerage methods being less common

New Delhi, July 02, 2024 (GLOBE NEWSWIRE) — Astute Analytica projects that the Japan insurance brokerage market was valued at US$ 66.04 billion in 20232 and is anticipated to reach US$ 93.19 billion by 2032 at a CAGR of 3.4% during the forecast period 2024–2032.

Japan’s insurance market is set for significant growth, with projections indicating an increase of US$ 90.54 billion from 2023 to 2032. The market is driven by heightened demand for short-term insurance solutions and mandatory vehicle insurance. As of 2023, the gross written premium of Japan’s general insurance market was JPY11.9 trillion ($89.8 billion), with a projected CAGR of over 3% during 2024-2028. Regulatory oversight by the Financial Services Agency (FSA) ensures a fair and consumer-protective environment, influencing premium and policyholder classifications. Key players such as Allianz SE, Asahi Mutual Life Insurance Co, and Dai Ichi Life Holdings Inc dominate the market, with Tokio Marine & Nichido Fire Insurance, Sompo Japan Insurance, and Mitsui Sumitomo & Aioi Nissay Dowa Insurance leading the sector.

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The insurance brokerage market in Japan, segmented by company, region, type, and application, is expanding rapidly. Gallagher’s recent launch of a new insurance brokerage in Japan highlights the sector’s growth potential. The market is characterized by a competitive landscape with both domestic and international players leveraging strategic growth analysis, product launches, and technological innovations. With agencies accounting for approximately 90.4% of the premium share, the importance of brokerage firms in the overall insurance landscape is evident. Additionally, only 34.6% of households in Japan are insured against earthquakes, indicating significant untapped potential.

Despite the challenges posed by cybercrime and regulatory complexities, the Japanese insurance brokerage market offers numerous growth opportunities. Advanced analytics and digital interfaces are enhancing customer interaction and streamlining processes. For instance, Tokio Marine & Nichido Fire and Eisai’s co-developed “Dementia Care Support Insurance” showcases the market’s innovative potential. The market’s stability is underscored by a less than 5% annual rise in medical inflation, and the introduction of new insurance products is expected to drive future growth. The rising awareness and demand for products like autonomous driving insurance, pet insurance, and insurtech are significant growth drivers. The market’s dynamics are further influenced by the presence of prominent entities such as Tokio Marine & Nichido Fire, which was the largest general insurer in 2023. With the competitive landscape continually evolving, the Japanese insurance market is poised for robust growth, driven by regulatory support, market innovation, and an increasing consumer base. This report provides a comprehensive overview of Japan’s insurance market, offering valuable insights for stakeholders and investors navigating this dynamic landscape.

Key Findings in Japan Insurance Brokerage Market

Market Forecast (2032) US$ 93.19 billion
CAGR 3.4%
By Brokerage Type Retail Brokerage (79.2%)
By Insurance Type Life Insurance (75.2%)
By End Users    Individual (87.6%)
By Mode Embedded (48.5%)
Top Trends
  • Digital transformation enhancing customer experience with innovative technology solutions.
  • Increasing adoption of AI and machine learning for risk assessment.
  • Growing demand for personalized insurance products tailored to individual needs.
Top Drivers
  • Aging population driving demand for health and life insurance.
  • Regulatory changes promoting transparency and consumer protection.
  • Technological advancements improving efficiency and service delivery.
Top Challenges
  • Cybersecurity threats posing risks to sensitive customer data.
  • Regulatory compliance complexities increasing operational burdens.
  • Intense competition driving down profit margins and market share.

Retail Insurance Brokerage Demand in Japan, Generates Over 79.,2% Market Revenue

The demand for retail insurance brokerage in Japan is primarily driven by the aging population, which necessitates tailored insurance products such as long-term care insurance and annuities. As of 2023, the insurance brokerage market was valued at $67.01 billion, projected to surpass $90.54 billion by 2032. The life insurance sub-segment is expected to increase its market share from 75.2% in 2022 to 78% by 2030, indicating a significant demand for life insurance products. Additionally, the individual end-user segment accounted for 87.6% of the market in 2022, highlighting the dominance of retail brokerage in catering to individual needs. The number of new insurance policies is expected to reach 2.04 million in FY2023, driven by Japan’s high disposable income and changing lifestyle trends.

Technological advancements, particularly in InsurTech, are transforming the industry, providing more personalized services and streamlined processes. This has contributed to the retail brokerage segment growing at a rate of 3.8% during the forecast period. Embedded insurance, which held a 48.5% market share in 2022, is a testament to the increasing integration of technology in insurance products in the insurance brokerage market. Additionally, the gross written premium of Japan’s general insurance market was JPY 11.9 trillion ($89.8 billion) in 2023, with the market expected to achieve a CAGR of over 3% during 2024-2028. The digital transformation within the industry has facilitated innovative insurance products, catering to the evolving needs of consumers, and driving demand for brokerage services. The market size for the FT2023 is expected to grow by 3.1% to 206,400 million yen, reflecting the increasing reliance on technology-driven insurance solutions.

The regulatory environment and economic factors also play crucial roles. Recent regulatory changes aimed at increasing consumer protection have led to greater reliance on brokers for professional guidance. The insurance market in Japan is projected to grow by $54.7 billion from 2022 to 2027. Agencies accounted for 15.3% of policies purchased in 2021, up from 6.4% in 2009, showing an increasing preference for brokerage services. In 2023, there were 194.58 million individual life insurance policies in place, with life insurance being the fastest-growing segment by type. The general insurance market, led by motor insurance, saw new vehicle registrations increase from January to November 2023 compared to 2022. With Tokio Marine & Nichido Fire as the largest general insurer in 2023.

Life Insurance: The Titan of Japan’s Insurance Brokerage Market, Contribute Over 75.2% Revenue

Life insurance stands as the paramount revenue generator in Japan’s insurance brokerage industry, driven by a confluence of demographic and economic factors. With a rapidly aging population, Japan boasts the world’s highest life expectancy at 84 years. Over 28% of the population is aged 65 or older, necessitating comprehensive life insurance policies to ensure financial security for dependents. This demographic shift has catalyzed a surge in life insurance premiums, which reached $452 billion in 2023, accounting for 80% of the total insurance market revenue. The penetration rate of life insurance in Japan is notably high, with 89.2% of households holding at least one life insurance policy.

The cultural inclination towards financial prudence and security further fuels the dominance of life insurance across Japan insurance brokerage market. In 2023, the average household expenditure on life insurance premiums was $4,200, significantly higher than the global average of $1,800. Japan’s life insurance market is characterized by a high policy retention rate of 95%, reflecting strong consumer trust and satisfaction. The industry’s growth is also propelled by innovative product offerings, such as whole life and endowment policies, which constitute 60% of the market share. Additionally, Japan’s regulatory framework, with robust solvency standards and consumer protection measures, ensures a stable and trustworthy environment for life insurance providers.

Brokerage firms play a pivotal role in this ecosystem, accounting for 70% of life insurance sales. The commission-based model incentivizes brokers to prioritize life insurance products, which offer higher commission rates of up to 10%, compared to 5% for non-life insurance. The digital transformation in the industry, with 68% of policies now sold online, has expanded the reach and efficiency of brokers. Consequently, brokerage firms saw a 15% year-on-year growth in revenue from life insurance sales in 2023, underscoring the sector’s unrivaled dominance in Japan’s insurance landscape.

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Embedded Insurance is Securing Future of Seamless Protection in Japan Insurance Brokerage Market, Capture Over 48.5% Market Share

Embedded insurance has emerged as a dominant model for insurance brokerage firms due to its ability to integrate seamlessly into the customer journey, offering protection at the point of need. This model leverages technological advancements and data analytics to provide personalized insurance solutions, enhancing customer experience and driving higher conversion rates. For instance, the embedded insurance market is projected to grow to approximately $700 billion in gross written premiums by 2030, a sixfold increase from its current size. This growth is driven by the convenience and immediacy of purchasing insurance alongside other products, such as when renting a car or buying electronics. Additionally, embedded insurance reduces customer acquisition costs to nearly zero, allowing premiums to reflect only expected claims expenses, taxes, and administration costs, making insurance more affordable and accessible.

The popularity of embedded insurance in the Japan insurance brokerage market is also fueled by its ability to create new revenue streams and enhance customer loyalty. Companies like Tesla and Allianz have successfully integrated insurance into their product offerings, providing added value and differentiating themselves in the market. This model also allows insurers to tap into new market segments that were previously considered too risky or not commercially viable. For example, a survey in the UK found that 71% of digital bank customers were interested in receiving embedded insurance offers, highlighting the demand for such integrated solutions. Furthermore, embedded insurance products lead to higher interaction frequencies and cross-selling opportunities, ultimately increasing customer retention.

Technological advancements and changing consumer expectations are key drivers behind the rise of embedded insurance. The integration of AI and data analytics enables insurers to offer highly personalized and relevant insurance products, meeting the unique needs of each customer. This approach not only improves user experience but also streamlines business processes and enhances operational efficiency. As a result, embedded insurance is not just a trend but a strategic priority for many firms, offering a competitive edge in a rapidly evolving market. The shift towards digital-first customer personas and the growing trust in technology and lifestyle brands further amplify the potential of embedded insurance, making it a must-have for modern insurance brokerage firms.

The Predominance of Individuals in Japan’s Insurance Brokerage Market, Accounts for 87.6% Market Share

In Japan’s insurance brokerage industry, individuals have emerged as the dominant force, overshadowing corporate and institutional end users. This dominance is attributed to a combination of demographic trends, economic policies, and technological advancements. As of 2024, individuals hold 87.6% of the insurance brokerage market share, with over 80 million active policies. Japan’s aging population, where 29% of the populace is over 65, drives the demand for health and life insurance. Additionally, with a life expectancy of 85 years, the need for long-term personal insurance solutions is more pronounced than ever.

Economic policies have significantly influenced this trend. The Japanese government’s initiatives to bolster financial literacy and insurance awareness have resulted in 75% of households possessing at least one insurance policy. Tax incentives for individual policyholders have spurred a 14% increase in new policy subscriptions over the past year. Furthermore, the rise of online platforms has made purchasing insurance more convenient, with 60% of new policies being acquired digitally. This shift underscores the appeal of digital brokerage services and their role in expanding access to insurance products.

Technological advancements have further cemented the individual’s position in the market. The proliferation of InsurTech has led to a 47% increase in personalized insurance products tailored to individual needs. Mobile applications and AI-driven advisory services have enhanced user engagement, with 65% of individual policyholders utilizing digital tools to manage their insurance. This tech-driven approach has not only improved customer experience but also increased penetration among younger demographics. Notably, 50% of policyholders are aged between 30 and 50, ensuring a steady future demand for individual insurance products. These factors collectively highlight why individuals are the largest contributors to Japan’s insurance brokerage market.

Japan Insurance Brokerage Market Key Players

  • Marsh Broker Japan, Inc
  • ARM CONSULTING CO., LTD.
  • Lead Insurance Service Co., Ltd
  • Kyoritsu Insurance Brokers of Japan Co., Ltd.
  • World Insurance Group
  • SJ Mobile Labs Pte Ltd
  • Marnix Reinsurance Brokers Pte Ltd
  • MST Insurance Service Co., Ltd.
  • Ginsen Risk Solutions Co., Ltd.
  • M & K Consultants
  • Sakura Geoservice Co., Ltd.
  • Toyota Tsusho Insurance Management Corporation
  • Nippon Souken Ltd.
  • ARM Consulting Co., Ltd.
  • Other Prominent Players

Key Segmentation:

By Brokerage Type

  • Retail Brokerage
  • Wholesale Brokerage

By Insurance Type

  • Life Insurance
  • General Insurance
    • Property & Casualty Insurance
    • Health Insurance
    • Car/Motor Insurance
    • Fire Insurance
    • Travel Insurance
    • Others

By Mode

  • Online
  • Embedded
  • Offline

By End Users

  • Corporate
  • Institutions
  • Individual

View report summary and Table of Contents (TOC): https://www.astuteanalytica.com/industry-report/japan-insurance-brokerage-market

About Astute Analytica

Astute Analytica is a global analytics and advisory company which has built a solid reputation in a short period, thanks to the tangible outcomes we have delivered to our clients. We pride ourselves in generating unparalleled, in depth and uncannily accurate estimates and projections for our very demanding clients spread across different verticals. We have a long list of satisfied and repeat clients from a wide spectrum including technology, healthcare, chemicals, semiconductors, FMCG, and many more. These happy customers come to us from all across the Globe. They are able to make well calibrated decisions and leverage highly lucrative opportunities while surmounting the fierce challenges all because we analyze for them the complex business environment, segment wise existing and emerging possibilities, technology formations, growth estimates, and even the strategic choices available. In short, a complete package. All this is possible because we have a highly qualified, competent, and experienced team of professionals comprising of business analysts, economists, consultants, and technology experts. In our list of priorities, you-our patron-come at the top. You can be sure of best cost-effective, value-added package from us, should you decide to engage with us.

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