The general insurance industry in Japan is projected to grow from JPY11.1trn (£76bn) in 2020 to JPY12.6trn (£98bn) in 2025, in terms of GWP, according to data and analytics firm, GlobalData.
Revised in the aftermath of the pandemic, the latest data forecasts the market to grow at a CAGR of 2.6% over 2020-2025, primarily due to a recovery in the economy following a decline in 2020.
Shabbir Ansari, insurance analyst at GlobalData, said: “[Japan's] economy declined by 4.6% in the fiscal year ending March 2021 due to the recurrence of new COVID-19 variants and slow vaccine rollout. Restrictions imposed on manufacturing and construction activities translated into slower growth of general insurance lines of business in 2020.”
Motor insurance is the largest segment in the Japanese general insurance industry, representing 51.5% in GWP in 2020. It is forecast to grow by 1.4% in 2021 against a decline of -3.6% in 2020, as vehicle sales improve. According to the Japan Auto Manufacture Association, new vehicle registrations during January-April 2021 increased by 4.2% compared with the same period in 2020.
Property insurance is the second largest segment, accounting for 25.1% of GWP in 2020. The segment is expected to grow at a CAGR of 5.1% during 2020-2025. Frequent nat cat events and increasing demand for real estate will support this trend, according to GlobalData's analysts.
The liability segment accounted for 7.8% of the general insurance premiums in 2020. The segment is expected to grow at a CAGR of 2.8% during 2020-2025 (driven by third party liability, which accounted for 80% of all liability insurance premiums in 2020).
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