SOMPO JAPAN RESEARCH INSTITUTE

In non-life, intense price competition reduced premium per risk, hitting both revenue and underwriting profit. In life, demographic shift and stagnation in the economy influenced the consumer's demand and affordability of protection, pushing down amounts of both new business and in force business of individual insurance. Insurers are taking measures to improve operational efficiency.



Sales and Products

Premiums have declined due to liberalization. [In 2002, the reinsurance of Compulsory Automobile Liability Insurance with the government was abolished, boosting its premium for insurers.]

Trend of premiums by line (JPY mil.)

Profitability

Insurers are taking measures to improve operating expense ratios to sustain profitability.

Trend of Loss ratio, Expense ratio and Net profit

Sales and Products

Individual Insurance: Term and whole life insurance sales are declining, while medical insurance sales is growing. New business written decreased to 13.1 mil. in 2003 from 13.8 mil. in 2002, and amount was JPY 101,381 bil. in 2003 compared to 120,712 bil. in 2002. Amount of business in force was 1,152,648 bil. in 2003, compared to 1,210,245 bil. in 2002.

Distribution of individual insurance by type (FY2003)

Annuity: Bank sales boosted Annuity new business number to 111 mil. (amount: JPY 5,199 bil.) in 2003.
Group Insurance: Group insurance sales in 2003 was JPY 13,797 bil. (amount), that is on the decline after FY 1997.

Profitability

The basic profit of life insurers slightly increased from the previous year to JPY 2.19 tril. in 2003 through cut in expenses.