Market Trends of Japan Car Insurance Industry
Rising Gross Written Premium with Declining Insurance Premium Rates
Japan has observed a continuous decline in car insurance premium rates being offered and charged by insurance companies, resulting in an increasing number of car insurance being purchased by car owners and gross written premiums of car insurance providers. Almost 24% of the people in Japan consider the aspect of low premiums when buying car insurance. Compulsory and Optional car insurance exist among the two types of car insurance products existing in Japan. Compulsory car liability insurance has a lower value of compensation claims and a 10% share in non-life insurance gross written premiums, with optional car insurance products having slightly higher insurance premium rates and a share of 45% in non-life insurance gross written premiums. As a result of declining car insurance premium rates, net premiums written on voluntary automobile accidents in Japan are observing a continuous rise with a declining trend for compulsory automobile liability insurance, which exists with a lower value of the claim. These trends are resulting in car insurance providers coming up with more customized car insurance products in the market.
Rising Digital Innovation
With digital innovation insurance industry in Japan is continuously expanding. The adoption of artificial intelligence-enabled tools, data analytics, and other online platforms is resulting in Japanese car insurance providers coming up with products designed as per the emerging market demand. Online channels of direct insurer websites or their application platforms are increasing the number of car owners buying, renewing, and claiming their car insurance online. Telematics or usage-based insurance is launched by Japanese insurance providers where the insurance premium rates are calculated based on the data collected from the vehicle leading to its market value last year and is expected to rise with further digital innovations. Continuous innovations in online insurance products are leading to insurance companies coming up with metaverse-based solutions where the user can communicate directly with the insurer during sales of car insurance products.
