Page 15 - Insurance Times October 2023

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Japan general insurance the Japanese general insurance indus- GlobalData, comments: “The aging
try, which is estimated to account for population (aged 65 or more) in South
industry to surpass $116 a 48.0% share of the GWP in 2023. It Korea, which accounted for 17.5% of
billion by 2027 is forecast to grow at a CAGR of 1.9% the total population in 2022, is ex-
The Japanese general insurance indus- over 2023-27, backed by increased pected to reach 20% by 2025, accord-
try is set to grow at a compound an- automobile sales. According to the Ja- ing to Statistics Korea. The rise in the
nual growth rate (CAGR) of 3.4% from pan Automotive Dealers Association older population will have a significant
and the Japan Light Motor Vehicle and impact on the demand for long-term
JPY11.9 trillion ($89.8 billion) in 2023
Motorcycle Association, new vehicle savings life insurance products.”
to JPY13.6 trillion ($116.5 billion) in
2027, in terms of gross written premi- registrations increased by 17.5% in H1 Pension insurance is the largest life in-
ums (GWP). 2023 as compared to the same period surance line in South Korea and is esti-
in 2022. Additionally, EV sales in- mated to grow by 7% in 2023, ac-
The Japanese general insurance indus- creased by 77.9% in H1 2023 as com- counting for a 36.5% share in terms of
try is estimated to grow by 2.8% in
pared to H1 2022. DWP. As the national pension scheme
2023, supported by an increase in au- provides a basic level of retirement
tomobile sales, new infrastructure South Korea life insurance income, people opt for supplementary
projects, an increasing demand for pension insurance policies to augment
policies covering natural catastrophic industry to surpass $190 their retirement corpus, driving the
(NatCat) events, and rising cases of billion by 2027 growth of the insurance line. Further-
cyberattacks. The South Korean life insurance indus- more, the government’s tax incentives
make pension insurance more afford-
Manogna Vangari, Insurance Analyst try is forecast to grow at a compound
at GlobalData, comments: “Japan’s annual growth rate (CAGR) of 5.6% able, which encourages people to in-
economy expanded by 1.5% in Q2 over 2023–27, from KRW205.3 trillion vest in such products. Pension insur-
2023, which is expected to translate ($154.2 billion) in 2023 to KRW255.4 ance is forecast to grow at a CAGR of
8% over 2023–27.
into 6% annual growth in 2023, much trillion ($191.2 billion) in 2027, in terms
stronger than the initially forecasted of direct written premiums (DWP). Endowment is the second largest life
annual growth of 1.0%, as per the Eco- The South Korean life insurance indus- insurance line, accounting for an esti-
nomic and Social Research Institute of try is expected to grow by 4.4% in mated share of 14.4% of the DWP in
Japan. The growth is supported by key 2023. The growth will be driven by 2023. Along with life coverage, endow-
sectors of the economy such as auto- changing demographic factors such as ment insurance policies offer relatively
mobiles, construction, real estate, and low fertility and a rapidly aging popu- higher interest rates as compared to
tourism as well as export activities, lation that has increased the demand other financial instruments such as
bank deposits, which makes them an
which will drive general insurance for pension, long-term care, and attractive investment alternative. En-
growth in the country.” whole-life policies. dowment insurance is forecast to grow
Motor insurance is the leading line in Prasanth Katam, Insurance Analyst at by 12% in 2023.

The Insurance Times October 2023 15