Insurance Industry Trends in Japan, Part 2: New Sales Channels — Challenges and Solutions
Japan is in the midst of a demographic transition that has immense implications for the domestic insurance market. With a population that is both shrinking and graying, insurers face a contracting market and need to cater to an aging clientele, trends that are seen prompting reorganization in the market.
Celent offers three proposals, all of which can be advanced with digital means, to help insurers and insurance technology vendors to thrive in this new era.
- Enhance modularization capabilities and decouple product creation from sales.
- Enhance capacity to respond socially and locally through differentiation via an omnichannel approach.
- Enhance cost-adaptability through self-service, efficiency, and simplification of processing operations.
“Japan’s insurance industry has taken a passive and reactive approach when it comes to sales channel change, acting primarily in response to external factors,” says Eiichiro Yanagawa, Senior Analyst with Celent’s Asian Financial Services group and author of the report. “However, this type of reactive approach is insufficient when it comes to solving the shared challenges faced by Japan’s insurers; a wealth of core issues inherent to the sales channel remain to be resolved.”
For insurers to thrive in the coming era, Celent believes that the below three points will play an integral part in company strategies and stresses the importance of innovation.
- Efficiency of systems.
- Enhanced synergy and profitability fueled by diversification of operations.
- Making forays into expected growth areas and overseas markets.
This report is the second of two. In Part 1, Celent provided a bird’s eye view of Japan’s position in the global and Asia-Pacific insurance markets before examining the growth potential of the life and nonlife insurance sectors and the evolution of insurance products and channels. We then considered related changes in the business environment, competitive pressures, and business strategies.