Page 19 - Insurance Times June 2021

insurance resilience than their That demonstrates the significant Stringent containment measures
emerging counterparts. However, to opportunity to provide more efficient impacted sales through broker and
restore macroeconomic resilience and risk capital and reinsurance to support agent channels that mandate face-to-
drive long-term growth, deep expanding coverage of global face interactions. Sales representatives
structural reforms are needed. catastrophe risks, a key area the remain the dominant channel for life
"The global pandemic has accentuated insurance-linked securities (ILS) market insurance policy sales in Japan with
the gap between the rich and poor. It could assist with. nearly 50% share.
has laid bare the need for governments
to focus on rebuilding and promoting Life insurance industry in In addition, persistent negative rate in
social cohesion. Social equity - and at Japan to remain below domestic market and decline in
its heart, creating equal opportunities interest rate in overseas markets have
for all - will be a defining feature of a pre-COVID-19 levels until created an uncertain business
more resilient world. environment for life insurers. As a
2024 result, insurers have reduced or
"The global insurance protection gap
The life insurance industry in Japan is temporarily suspended sales of foreign-
reached a new high of USD 1.4 trillion.
forecasted to recover from 2021 currency denominated policies.
Closing this gap would both support
onwards and increase at a compound
long-term economic stability and To mitigate the impact of the
annual growth rate (CAGR) of 1.8%
increase society's capacity to absorb pandemic, life insurers have launched
shocks. Making insurance more widely during 2020-2024. However, it will still online platforms to generate sales.
be lower than 2019 figures, according
available and affordable will be Leading insurers such as Meiji Yasuda
essential. But re/insurers and leaders to GlobalData, a leading data and Life Insurance and Dai-ichi Life Holdings
in business and government must analytics company. launched online sales of life insurance
make resilience a shared priority." GlobalData has revised Japan's life
policies post the onset of the
Swiss Re believes that structural insurance forecast in the aftermath of pandemic. Insurers are also expanding
reform is essential to rebuild resilience COVID-19 outbreak. As per the latest the coverage of their products by
around the world, saying this can, data, Japan's life insurance industry is providing COVID-19 hospitalization and
"build long-term growth prospects and estimated to decline from JPY31.4 death benefits, in addition to the pre-
replenish macroeconomic resilience." trillion (US$288.2bn) in 2019 to JPY28.3 existing benefits.
trillion (US$264.6bn) in 2020, in terms
Swiss Re notes that the pandemic has
driven people to, in some cases, think of gross written premium (GWP). Increased awareness of health and life
differently about insurance and risk PratyushaMekala, Insurance Analyst at insurance amid the pandemic has led
protection. GlobalData, comments: "Despite the to a spike in the demand for COVID-19
specific insurance products in 2020.
"For many people, the COVID-19 economy registering an annualized Taiyo Life Insurance revealed in April
experience has highlighted the 11.7% growth in the last quarter of 2021 that the sales of its COVID-19
importance of risk protection covers," 2020, it contracted by 4.8% in 2020.
the reinsurance firm explained. Emergency measures introduced by insurance product launched in
the government and unfavorable September 2020 exceeded 100,000
Interestingly, out of the insurance policies, indicating significant demand.
economic environment impacted
resilience areas measured by
protection gaps, it is catastrophe consumer spending, including life Ms. Pratyusha concludes: "The
insurance that remains the largest. insurance." resurgence of the COVID-19 pandemic
Swiss Re said that, "Global natural According to the data released by the has dampened the growth prospects
catastrophe resilience remains the Life Insurance Association of Japan, of the Japan life insurance industry.
lowest of all, with the global index 6.74 million new business individual Momentum in vaccine rollout and
reading at 24% in 2020, meaning that insurance policies were sold during government's measures to support the
76% of these protection needs around April-September 2020, registering a revival of economy will aid the demand
the world are uninsured." year-on-year decline of 35.6%. for life insurance in 2021." T

The Insurance Times, June 2021 19