JAPANESE LIFE INSURANCE

These as well as other headline statistics mask the wide range of developments that have taken location inside the market considering that the get started of the decade. They do not tell the story of the shift inside the profile of providers, merchandise and distribution, at the same time as inside the ranks of the winer and losers.

For years, Japan has earned respect as a giant in global insurance markets. It is the second largest marketplace inside the world, just after the U.S. Based on Swiss Re, total premium income in 2006 reached $363 billion, representing roughly one-sixth of total world life insurance premium income. Japanese life insurers are amongst the largest inside the world, which includes the largest of all, Japan Post Insurance.

But time has not kept Japan immune from alter. Premium income has slipped just after a period of steady growth inside the 1990s, reflecting the existing high rate of penetration of life insurance merchandise in an economy that has noticed only mild economic growth over a variety of years. From 1998 to 2001, seven life insurers in Japan either became insolvent or entered rehabilitation consequently of decreased asset values and high-interest-rate guarantees on merchandise that could not be supported by existing investment yields.


INVESTMENT MARKETS

Component of the story, as with any explanation of monetary markets and merchandise in Japan, begins with interest rates, which have remained low considering that 2000, when inflation has remained at about zero. Ten-year Japanese government bond yields have stayed at about 1.5% to 1.8%. The stock marketplace, by contrast, has been volatile; in March 2000, the Nikkei was over 20,000 but declined to a low of under 8,000 in April 2003. The index subsequently skilled steady gains to over 18,000 in mid-2007 ahead of plunging toward 12,500 inside the global equity rout of January 2008.

SHIFTING DEMOGRAPHICS

From a demographic standpoint, Japan is becoming 1 of by far the most aged societies inside the world. Totally 40% of the population is projected to be over 65 by 2050, and roughly seven million baby boomers born between 1947 and 1949 have either lately retired or will soon reach retirement age. Furthermore, Japanese life expectancy is amongst the highest inside the world, at 86 for females and 79 for males.