The deregulation of bancassurance in Japan offers
many opportunities for growth in an otherwise stagnant market. Banks will
capture between 20% and 25% of new business in life products, between 5%
and 15% in personal non-life products, and approximately 80% in
annuities by 2012. However, the path ahead will not be easy and
will require significant investment in people, processes, and technology.
Liberalization of Japan’s bancassurance market has
been one of the largest changes to affect the country’s insurance
industry in the past few years. In a new report, Bancassurance in
Japan: Lessons from Europe and the US, Celent examines the Japanese
life and non-life insurance industries against the backdrop of mature
bancassurance markets abroad and analyses the critical factors for
success.
Insurers interested in understanding the potential
of this channel can look toward several global examples. In Europe,
supportive regulatory frameworks, well-developed banking networks, simple
financial products, and strong relationships with banking advisors have
turned bancassurance into a success story. By contrast, the US
bancassurance market has performed disappointingly, in large part because
participants have targeted sales of profitable products without
recognizing the amount of support needed to sell these products at
significant volumes. Japan shares traits with both the European and US
financial services environments.
“In recent years, insurers in Japan have
introduced agent extranets and other technologies in order to automate the
sales cycle,” says Catherine
Stagg-Macey, co-author of the report and senior analyst with Celent’s
Insurance Group. “This has given insurers experience with the kinds of
technologies that can help them lower distribution costs while maximizing
profit margins.”
“Japanese banks' success in selling annuities
would seem to augur well for the future of the bancassurance market now
that it has been fully deregulated,” adds Neil
Katkov, co-author of the report and managing director of Celent’s
Asia Research Group.
This report analyses the potential of the new
bancassurance market in Japan by considering the structure of the Japanese
market and drawing on the experience of this channel in both Europe and
the United States. It explores what the Japanese bancassurance market will
look like in a few years, in addition to examining best practices insurers
can adopt in order to effectively compete in this new channel.
The 23-page report contains 4 tables and 13 figures.
A table of contents is available
online.
