Can you tell us the trend of online life insurance companies?

A

 

The number of insurance companies which have internet channel has been gradually increasing since online insurance companies established in 2008.
We believe this would be a positive development, as it would help drive growth in the online market in medium- and long-term. On the other hand, it causes intensification of competition in the short term.

 

 

 

 

 

 

 

What are the characteristics of the Japanese life insurance industry?

A

 

The Japanese life insurance market has the following three characteristics: Huge market, huge inefficiencies and huge changes.

 

⋅Huge market

Japan's life insurance market is worth approximately ¥34 trillion*1 - and roughly 90%*2 of Japanese households having life insurance policies.

 

⋅Huge inefficiencies

As the total household income continues to decline, many customers think life insurance premiums are a large financial burden. This in addition to most people thinking life insurance to be complicated and difficult to understand is resulting in much information asymmetry between customers and insurance companies and is the cause of various inefficiencies.

 

⋅Huge changes

There has been much change in other neighboring financial industries such as non-life insurance, securities and banking services. The advancement in technology has led to many financial services being offered via the Internet, and all financial institutions are required to strictly observe fiduciary duty.

At Lifenet, we view these characteristics as a business opportunity, and aim to be the leading company driving the growth of the online life insurance market.

 

*1 based on data from Life Insurance Fact Book 2019 by The Life Insurance Association of Japan

*2 based on data from a nationwide report on the life insurance industry (2018) by Japan Institute of Life Insurance.

 

 

 

 

 

 

 

 

What is the current market share of online life insurance and how do you see the market developing?

A

 

The market share for online life insurance in Japan currently stands at 3.3% for new policies sold*1.
Looking ahead, we see significant growth potential in the online distribution of life insurance, with 12.5% of customers expressing an interest to apply via the Internet*1.

 

Market overview

 

*1: Based on data from a nationwide report on the life insurance industry (2018) by Japan Institute of Life Insurance.

 

 

 

 

 

 

Can you tell us the price competition of insurance premiums?

A

 

We believe life insurance is less exposed to the risk of intensifying price competition in the short term than other sectors that sell financial products online (stock brokerages, banks, auto insurance, etc.) based on the following three points:

⋅A relatively less transactions because customers face high costs if they change products

⋅A license is needed from Japan's Financial Services Agency to set up a life insurance company and sell life insurance products.

⋅Mature existing life insurance companies are reluctant to move into the online market, as sales in this channel would cannibalize product sales in their face-to-face sales channel.