General insurance industry to surpass $116bn by 2027 in Japan, GlobalData predicts

Written by Dan McGrath

12/09/2023

The Japanese general insurance industry is set to grow by a compound annual growth rate (CAGR) of 3.4%, increasing from $89.8bn in 2023 to $116.5bn in 2027, in terms of gross written premiums (GWP).

GlobalData has forecast that the general insurance industry will grow by 2.8% in 2023, supported by an increase in automobile sales, new infrastructure projects, an increasing demand for policies covering natural catastrophic events and rising cases of cyberattacks.

Insurance analyst at GlobalData, Manogna Vangari, said: “Japan’s economy expanded by 1.5% in Q2 2023, which is expected to translate into 6% annual growth in 2023, much stronger than the initially forecasted annual growth of 1.0%, as per the Economic and Social Research Institute of Japan. The growth is supported by key sectors of the economy such as automobiles, construction, real estate, and tourism as well as export activities, which will drive general insurance growth in the country.”

Motor insurance is estimated to account for a 48% share of the GWP in 2023, making it the leading line in the Japanese general insurance industry. It is forecast to grow at a CAGR of 1.9% between 2023-27, backed by increased automobile sales.

Property insurance is the second leading general insurance line and is estimated to account for a 27.4% share of GWP in 2023. With Japan prone to floods, landslides, earthquakes and volcanic eruptions, the GWP is forecast to grow by 5.4% in 2023, supported by the increased demand for policies covering national catastrophic events.

Liability insurance is estimated to account for 8.2% share premiums in 2023 and is forecast to grow at a CAGR of 3.5% over 2023-27, as a result of increasing instances of cyberattacks creating a high-risk environment for companies globally.

Vangari added: “The general insurance penetration in Japan at 1.8% in 2023, which is lower as compared to the advanced APAC economies like Australia (3.6%), and New Zealand (2.3%), provides ample growth opportunities for insurers. Increasing automobile sales, innovative product developments, and rising demand for national catastrophic policies present a positive growth outlook for the general insurance sector over the next five years.”

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