The general insurance industry in Japan is projected to grow from US$104.1bn(JPY11.1 trillion) in 2020 to US$133.1bn(JPY12.6 trillion) in 2025, in terms of gross written premiums (GWP), according to GlobalData, a leading data and analytics company.
GlobalData has revised Japan’s general insurance forecast in the aftermath of the COVID-19 pandemic.
As per the latest data, the general insurance industry in Japan is expected to grow at a compound annual growth rate (CAGR) of 2.6% over 2020-2025, primarily due to recovery in economy after witnessing a decline in 2020.
Shabbir Ansari, Insurance Analyst at GlobalData, comments: “Japanese economy declined by 4.6% in the fiscal year ending March 2021 due to the recurrence of new COVID-19 variants and slow vaccine rollout. Restrictions imposed on manufacturing and construction activities translated into slower growth of general insurance lines of business in 2020.”
Motor insurance is the largest segment in the Japanese general insurance industry with 51.5% of GWP in 2020. It is forecasted to grow by 1.4% in 2021 against the decline of -3.6% in 2020, backed by improved vehicle sales. According to the Japan Auto Manufacture Association (JAMA), new vehicle registrations during January-April 2021 increased by 4.2% as compared to same period in 2020.
The segment is expected to grow at a CAGR of 1.7% during 2020-2025. The launch of fully autonomous vehicles targeting local and global markets as well as expansion of electric car market is expected to drive growth of the motor insurance segment during the forecast period.
Property insurance is the second largest segment, accounting for 25.1% of general insurance premium in 2020. The segment is expected to grow at a CAGR of 5.1% during 2020-2025.
Frequent natural catastrophic events and increasing demand for real estate will support the growth of property insurance in the country. For instance, according to the General Insurance Association of Japan, 221,994 insurance claims were filed for damages caused by the Fukushima earthquake as of 12 May 2021.
Liability insurance segment accounted for 7.8% of the general insurance premiums in 2020. The segment is expected to grow at a CAGR of 2.8% during 2020-2025 driven by Third Party Liability sub-segment that accounted for 80% of the liability insurance premiums in 2020.
Ansari concludes: “The Japanese economy is expected to face challenges in the short-term due to the impact of COVID-19 pandemic. Product innovation in the automobile sector and the country’s vulnerability to nat-cat events will drive the growth for general insurance industry during the forecast period.”
General insurance industry in Thailand to reach US$10.6bn in 2025
The general insurance industry in Thailand, in terms of gross written premiums, is projected to grow from THB261.4bn (US$8.4bn) in 2020 to THB318bn (US$10.6bn) in 2025, according to GlobalData.
GlobalData has revised Thailand’s general insurance forecast in the aftermath of COVID-19 outbreak. As per the latest data, the general insurance industry’s growth slowed to 3.3% in 2020 as compared to the 4.6% growth registered in 2019 due to the pandemic. Growth is expected to recover from 2022 onwards and witness upward trend, supported by the gradual economic recovery.
Pratyusha Mekala, Insurance Analyst at GlobalData, comments: “Thailand economy continues to suffer from the repercussions of the COVID-19 pandemic, which delayed the recovery of tourism sector. In addition, weak domestic activity is expected to impact the general insurance premiums in 2021.”
Motor insurance is the largest general insurance segment accounting for 56.3% of the general insurance GWP in 2020. Decline in automobile sales due to lockdown restrictions along with economic disruptions negatively impacted motor insurance growth, which declined from 5.6% in 2019 to 1.5% in 2020.
Motor insurance is witnessing signs of recovery due to gradual easing of lockdown restrictions, improved consumer demand and government stimulus measures. According to the Federation of Thai Industries, domestic car sales during January-April 2021 increased by 9.6% on year-on-year basis to reach 252,269 vehicles.
Personal accident and health insurance, which held 19.3% of general insurance premium in 2020, is expected to grow by 6.9% during 2020-2025. Health insurance, with 6.6% share in premiums, was the fastest growing segment registering 37.1% growth in 2020.
Aging population, rising demand for COVID-19 health insurance policies, and increasing awareness supported health insurance growth.
Mekala concludes: “The general insurance industry in the country is expected to face challenges in the short-term due to the resurgence of COVID-19 pandemic. Government’s stimulus packages and momentum in vaccine rollout will support the recovery of the general insurance industry.”