Japan Car Insurance Market Size (2024 - 2029)

The Japan car insurance market is poised for growth, driven by the mandatory requirement for all registered vehicles to have compulsory automobile liability insurance, which creates a market gap for additional coverage options. The market's expansion is further supported by the increasing unit sales of new passenger cars, particularly SUVs and mini cars, although the decline in used car sales presents challenges. Technological advancements and the rise of insurtech are transforming the market, with more providers offering online services and telematics-based insurance products. These developments are expected to significantly influence the market size and shape the future of car insurance in Japan.

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Market Size of Japan Car Insurance Industry

Japan Car Insurance Market Summary
Study Period 2020-2029
Base Year For Estimation 2023
Market Size (2024) USD 20.31 Billion
Market Size (2029) USD 26.18 Billion
CAGR (2024 - 2029) 5.21 %
Market Concentration Low

Major Players

Japan Car Insurance Market Major Players

*Disclaimer: Major Players sorted in no particular order

Japan Car Insurance Market Analysis

The Japan Car Insurance Market size in terms of direct written premiums value is expected to grow from USD 20.31 billion in 2024 to USD 26.18 billion by 2029, at a CAGR of 5.21% during the forecast period (2024-2029).

Under the law of Japan, all registered vehicles must be covered with compulsory automobile liability insurance to protect third parties from accidental injuries. These compulsory car insurances do not exist with coverage to the insured, property damage to third parties, and repair or replacement for the damaged vehicles, creating a market gap in car insurance products and providing an opportunity for insurance companies to launch their customized car insurance products. Post-COVID-19, net premiums written for compulsory automobile liability insurance in Japan observed a decline last year and increasing premiums of alternative car insurance products.

Unit sales volume of new passenger cars in Japan is observing an increase, with SUVs, Mini cars, and medium cars occupying a significant share of more than 60% in the overall sales, resulting in car insurance providers focusing on specific segments of cars on the other hand sales of used passenger cars are observing a decline and impacting their insurance business. Rising car safety norms and fewer car accidents in Japan are leading to declining insurance premiums on car insurance making it convenient for car owners to purchase from a varied segment of available car insurance products.

Rising technological and digital innovations are leading car insurance products in a new direction. Insurtech penetration in Japan Non-life insurance industry is observing a continuous rise, leading to an increasing number of car insurance providers coming up with online car insurance services to buy, renew, and claim car insurance. Telematics or usage-based insurance, which makes the insurance company calculate premium rates based on data generated from driving behavior, minimizes the asymmetric information and moral hazard issues between the buyers and insurers. Japan's telematics insurance market size has observed a continuous rise over the years and is expected to create rapid growth in Japan's car insurance market.

Japan Car Insurance Industry Segmentation

Car insurance is a contract between the car owner and the insurance company where the car owner agrees to pay a fixed premium rate over a period for protection against financial loss in the event of any damage or loss to the car. Rising digital insurance and product innovations in the market are making car insurance products more inclusive among car owners.

The study gives a brief description of the Japanese car insurance market and includes details on car insurance premiums, investment by car insurance companies, and the launch of new car insurance products.

The Japanese car insurance market is segmented by coverage, by application, and by distribution channel. By coverage, the market is segmented into third-party liability coverage and collision/comprehensive/other optional coverage. By application, the market is segmented into personal vehicles and commercial vehicles. By distribution channel, the market is segmented into direct sales, individual agents, brokers, banks, online, and other distribution channels. 

The report also covers the market sizes and forecasts for the Japan car insurance market in value (USD) for all the above segments.

By Coverage
Third-Party Liability Coverage
Collision/Comprehensive/Other Optional Coverage
By Application
Personal Vehicles
Commercial Vehicles
By Distribution Channel
Direct Sales
Insurance Agents
Brokers
Banks
Online
Other Distribution Channels
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Japan Car Insurance Market Size Summary

The Japan car insurance market is poised for significant growth, driven by a combination of regulatory requirements and evolving consumer preferences. Compulsory automobile liability insurance is mandated for all registered vehicles, creating a foundational market for car insurance products. However, the limited coverage of these compulsory policies presents a gap that insurance companies are eager to fill with customized offerings. The post-COVID-19 landscape has seen a shift, with a decline in net premiums for compulsory insurance and a rise in alternative products. The increasing sales of new passenger cars, particularly SUVs, mini cars, and medium cars, are prompting insurers to focus on specific segments, while the decline in used car sales impacts the insurance business. Despite rising car safety norms leading to lower premiums, the market is witnessing a surge in demand for diverse car insurance products.

Technological advancements and digital innovations are reshaping the car insurance landscape in Japan, with insurtech penetration on the rise. This has led to the proliferation of online services for purchasing, renewing, and claiming insurance. Telematics, or usage-based insurance, is gaining traction, allowing insurers to set premium rates based on driving behavior data, thereby reducing information asymmetry and moral hazard issues. The market is characterized by a fragmented landscape with numerous players, including major companies like Tokio Marine & Nichido Fire Insurance, Mitsui Sumitomo Insurance, and Sompo Japan Insurance. Digital tools such as artificial intelligence and data analytics are enabling insurers to develop products that meet emerging market demands, including metaverse-based solutions for direct communication with customers. These trends are fostering a competitive environment where insurance providers are continually innovating to capture market share.

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Japan Car Insurance Market Size - Table of Contents

  1. 1. MARKET DYNAMICS AND INSIGHTS

    1. 1.1 Market Overview

    2. 1.2 Market Drivers

      1. 1.2.1 Rising Sales of Cars in the Japan

      2. 1.2.2 Decline in Car Insurance Premium Rates

    3. 1.3 Market Restraints

      1. 1.3.1 Lack of Awareness on Car Insurance Policies

      2. 1.3.2 Increase in False Insurance Claims and Scams

    4. 1.4 Market Opportunities

      1. 1.4.1 Online Insurance Products Expanding the Car Insurance Sales

      2. 1.4.2 Demand for Customized Car Insurance Products by the Buyers

    5. 1.5 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.5.1 Bargaining Power of Suppliers

      2. 1.5.2 Bargaining Power of Buyers

      3. 1.5.3 Threat of New Entrants

      4. 1.5.4 Threat of Substitutes

      5. 1.5.5 Intensity of Competitive Rivalry

    6. 1.6 Technological Innovations in Japan Car Insurance Market

    7. 1.7 Impact of COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Coverage

      1. 2.1.1 Third-Party Liability Coverage

      2. 2.1.2 Collision/Comprehensive/Other Optional Coverage

    2. 2.2 By Application

      1. 2.2.1 Personal Vehicles

      2. 2.2.2 Commercial Vehicles

    3. 2.3 By Distribution Channel

      1. 2.3.1 Direct Sales

      2. 2.3.2 Insurance Agents

      3. 2.3.3 Brokers

      4. 2.3.4 Banks

      5. 2.3.5 Online

      6. 2.3.6 Other Distribution Channels

Japan Car Insurance Market Size FAQs

The Japan Car Insurance Market size is expected to reach USD 20.31 billion in 2024 and grow at a CAGR of 5.21% to reach USD 26.18 billion by 2029.

In 2024, the Japan Car Insurance Market size is expected to reach USD 20.31 billion.

Japan Car Insurance Market Report Snapshots

Japan Car Insurance Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)