With a population of approximately 128 million, Japan is the world’s second-largest market for insurance products and services. Yet just four large insurance companies dominate the life sector with a combined market share of over 95 percent, and three large carriers control about 89 percent of the P&C sector.
Japan’s consumers lead the world in their adoption of technologies such as smartphones and mobile gaming, but its businesses lag behind their customers when it comes to taking advantage of those technologies to create compelling customer experiences. Although Japan’s government has set a national agenda of growth and innovation ahead of the Tokyo Olympics in 2020, most insurers struggle to innovate within the boundaries of their own enterprises.
Focusing on digital transformation and customer-centricity
I’m working closely with Japan’s leading insurers as they embark on their quest for digital transformation and customer-centricity. Japan will be a bellwether for the demographic and technology changes that will impact insurers in aging countries over the decade to come.
The market dynamic in Japan is very interesting. After years of consolidation with a goal of improving their expense ratios, Japanese insurers are now focused on growth and the customer experience. But they face many hurdles—a strict regulatory environment, a shrinking population and risk-averse organizational cultures within the largest financial services groups.
Addressing regulatory challenges, a shrinking population and risk-averse cultures
How Japanese insurers address these challenges will hold many lessons for insurers in the rest of the world as they embark on journeys of digital transformation. The ways in which the mega-trends identified in the Accenture Technology Vision for Insurance for 2014 are manifesting themselves in Japan will be particularly interesting to watch.
To learn more, download the report: Accenture Technology Vision for Insurance 2014