The Japanese general insurance market is projected to grow at a 2.2% compound annual growth rate (CAGR). Gross written premiums are set to increase from $81.1 billion in 2024 to $93.9 billion by 2028, as per GlobalData. The industry is expected to grow 1.7% in 2024, driven by higher demand for natural catastrophes and workers’ compensation policies. Sneha Verma, an Insurance Analyst at GlobalData, said Japan’s economy entered a recession in early 2024 after contractions in late 2023. This led to a 0.5% decline in the general insurance industry in 2023 compared to 3.4% growth in 2022. Growth is expected to rebound in 2024, supported by premium rate hikes in many lines due to high inflation and extreme weather – related claims.
Motor insurance, which makes up 47.5% of 2024’s gross written premiums (GWP), is the largest segment. Despite higher vehicle sales, motor insurance premiums dropped by 0.1% in 2023 due to lower accident rates, and similar trends are expected in 2024. Insurers might raise premiums in 2025 because of claims from severe weather. In April 2023, hailstorms in Hyogo Prefecture caused $0.21 billion in vehicle losses with 79,468 claims. Motor insurance is forecast to grow at a 1.5% CAGR from 2024 – 2028. Property insurance, 27.6% of 2024’s GWP, should grow 5.4% in 2024 due to higher premiums from natural disasters. In June 2023, the General Insurance Rating Organization of Japan raised personal fire insurance premiums, and property insurance is projected to grow at a 2.8% CAGR from 2024 – 2028.
Liability insurance, 8.9% of 2024’s GWP, is forecast to grow 4.2% in 2024, supported by rising demand for cyber and workers’ compensation insurance. Workers’ compensation claims rose 21% in 2023. This segment is expected to expand at a 3.9% CAGR from 2024 – 2028. Personal accident and health, marine, aviation, transit, and financial lines insurance will make up the remaining 15.9% of 2024’s GWP. Verma noted that slower motor insurance growth, given its large share, indicates a moderate growth outlook. High claim payouts from natural disasters and inflation will make insurers reassess risk and raise premiums short – term.
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