Japan's life insurers see profit rise amidst lower claims

The industry is projected to deliver better core profits in FY2024.

Life insurers in Japan witnessed growth in their core profits and net income after tax, thanks to lower pandemic-related claims and a better investment environment with higher interest rates and a weakened yen, CreditSights said.

In fiscal year 2023 (FY2023), Nippon Life's substantial premium growth stands out amidst mixed growth among peers, some of which experienced modest increases or declines. 

Strategic acquisitions were notable, with Nippon Life acquiring a stake in Corebridge and Sumitomo Life purchasing Singlife, indicating a focus on overseas market growth due to domestic market saturation and demographic challenges.

The industry shows strong financial strength with solvency ratios well above regulatory requirements, indicating a well-capitalized sector capable of managing market risks and the transition to a new economic solvency framework.

Looking ahead to FY2024, Japanese life insurers are expected to deliver stable or slightly improved core profits and maintain their solid financial strength, enabling them to handle potential market volatility and regulatory changes.