Japan’s general insurance industry is expected to experience steady growth over the next few years. According to GlobalData, the sector is projected to expand from JPY 11.7 trillion ($81.1 billion) in 2024 to JPY 12.7 trillion ($93.9 billion) by 2028. This growth represents a compound annual growth rate (CAGR) of 2.2% in terms of gross written premiums (GWP).
Short-Term Outlook
In 2024, general insurance in Japan is anticipated to grow by 1.7%, driven by increasing demand for natural catastrophe policies and workmen’s compensation. Sneha Verma, an insurance analyst at GlobalData, notes that this growth comes after a challenging period for the industry.
Economic Impact
Japan’s economy entered a recession in early 2024 following a contraction in the last two quarters of 2023. This economic downturn contributed to a decline of 0.5% in the general insurance sector in 2023, a sharp contrast to the 3.4% growth observed in 2022. Despite this, Verma anticipates a rebound in 2024, supported by rising premium rates across various insurance lines due to high inflation and increasing claims from extreme weather events.
Motor Insurance: Dominant Sector
Motor insurance remains the largest segment within Japan’s general insurance market. It is projected to represent 47.5% of the total general insurance GWP in 2024. However, recent years have seen a rise in the frequency and severity of extreme weather events, leading to higher claims and potentially increased motor insurance premiums in 2025.
Conclusion
Overall, Japan’s general insurance sector is on track for significant growth, with projections indicating it will approach $100 billion by 2028. This growth is expected to be supported by higher premium rates and increased demand for certain insurance products.
