The income of Japan’s life insurance sector surged by 23.1% by the end of March 2024, reaching $125.37 million (¥19.9 billion), driven primarily by increased core business profits. This growth stemmed from a significant decrease in hospitalization benefit payments for COVID-19, despite a rise in foreign exchange hedging costs.
This marked a significant leap from the previous year’s income of $23.94 million (¥3.8 billion).
Premium and other income also saw a notable increase, climbing 12.9% to $2.31 billion (¥365.9 billion), according to data from Japan’s Financial Services Agency (FSA). The FSA attributed this rise to the growing demand for single premium insurance denominated in yen, spurred by rising domestic interest rates.
“Premium and other income increased from the previous year, primarily due to an increase in single premium insurance denominated in yen currency because of rising domestic interest rates,” the FSA stated in a press release.
Similarly, net income attributable to shareholders of Japan’s non-life insurers more than doubled, reaching $93.24 million (¥14.8 billion). This sharp increase was attributed to higher investment profits and reduced COVID-19 related losses, especially in overseas markets.
“Net income attributable to shareholders increased from the previous year, primarily because of the increase in investment profit and the decrease in COVID-19 related losses, particularly in overseas business,” the FSA explained.
Additionally, net premiums written experienced a modest rise of 5.8%, totaling $805.14 million (¥127.8 billion). This increase was primarily due to strong performance in overseas business and the depreciation of the yen, despite a reduction in contract numbers following a spike prior to the October 2022 rate revisions in domestic fire insurance.
“Net premiums written increased from the previous year, primarily because of the good performance of overseas business combined with the depreciation of the yen, despite the pullback in the number of contracts after the increase seen prior to the Oct. 2022 rate revisions of fire insurance in domestic business,” the FSA added.
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