Japan's commercial insurance market 2019
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We expect Japan’s commercial insurance premiums to grow by 4.4% this year, after estimated 1.6% growth in 2018 and average 3.1% annual growth over the last three years. Last year’s growth was supported by higher premium rates on property lines hit by natural catastrophe events. Motor premiums will be volume driven, but premium rates will be lower. While prices are low, as a means of attracting business, motor insurers have expanded the scope of coverage they offer. At the same time, however, the cut in the statutory interest rate from 5% to 3% due in April 2020 will affect the estimation of liability insurance claims based on present value. A lower statutory interest rate will result in higher expected liability claims1, as most commercial insurance payments are for vehicle, property damage and third party liability covers. Moreover, higher costs associated with the expected consumption tax hike in October 2019 will have a negative impact on insurers’ profits.