In my previous two posts, I talked about the state of the Japanese insurance industry and some key trends that are shaping how Japanese insurers do business. But what practical steps can insurers around the world take based on what we are learning from Japan?

I offer three recommendations:

  1. Japan is at the forefront of “convergence” because so many of its businesses are interlocked conglomerates (keiretsu) with diverse, overlapping interests across industries. Based on Japan’s success, I recommend insurers around the world consider targeting new contestable market spaces with partners from other industries.
  2. Japanese insurers help other companies expand into new markets as they internationalize. Insurers in other countries could also benefit from the formation of new ecosystems of value, as business advisors to companies grappling with the legal challenges of new territories.
  3. Japan’s aging population is prompting insurers to look at innovative life and health products—cancer insurance is one—something insurers in other aging countries will want to emulate.

Emerging opportunities

From Japan’s experiences, we can also discover opportunities emerging for agile insurers. For example:

  • Digital-physical blur. Smart objects, devices and machines are increasing our insight into and control over the physical world, and Japanese manufacturers are leading the way with “edge devices” such as unmanned aerial vehicles. Insurers in Japan have been proactive in understanding the impact and underwriting risk for unmanned vehicles, on the valuable role of de facto regulator for these innovations. In a similar way, insurers worldwide can enable disruption by underwriting the risks of emerging technologies.
  • From workforce to crowd source. Cloud, social and collaboration tools and technologies now allow insurers to tap into vast pools of human resources across the world, many of whom are motivated to help. Recognizing that their ability to innovate from within is limited by their organizational cultures and skill sets, Japanese insurers are looking at disruptive ideas—for example, using the wisdom of the crowd to nurture creative ideas in an environment similar to that of a start-up. From this we can learn that breakthrough innovations may need to come from outside the traditional boundaries of our own organization.
  • The business of applications: Everywhere you look in Japan, you will see people playing games on their mobile phones, tablets and handheld gaming consoles. Insurers have yet to take advantage of these direct channels to reach consumers—the majority of insurance interactions are still face-to-face through agents. I believe that the “high-context” nature of Japanese as a language, with its reliance on non-verbal cues, could prompt more extensive use of video communications. The lesson for insurers here is to not be left behind by your customers’ adoption of technology.

Those insurers who follow Japan’s example, partnering with other businesses, building new ecosystems, developing innovative new products and embracing the new digital technologies, will be the ones who leapfrog their competitors over the next decade.

If you’d like to discuss these ideas, feel free to contact me at

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