Japan's four biggest life insurers have seen an estimated 16% decline in combined domestic premium income in the fiscal year ended 31 March 2017.
The four -- Dai-ichi Life Holdings, Nippon Life Insurance, Meiji Yasuda Life Insurance and Sumitomo Life Insurance -- likely generated a combined JPY14.7 trillion (US$132 billion) in insurance premiums in Japan in the 2016 fiscal year. The decline amounted to JPY2.7 trillion from a year earlier, the sharpest drop since the 2008 global financial crisis, reported The Nikkei.
At Dai-ichi Life, aggregate premium income in Japan for its three life insurance units slumped by more than JPY1 trillion yen, according to its earnings statement. Nippon Life, Japan's No. 1 life insurance company, apparently suffered a similar downturn, which would amount to the worst year-on-year hit in the company's history.
As market interest rates fell after the Bank of Japan adopted negative rates, life insurers were forced to raise premiums or halt sales of lump-sum wholelife insurance policies. Sales of various policies via bank counters and through sales agents also decreased.
But weaker sales were due in part to insurance companies' strategic decisions to reduce offerings. Consequently, base profits, which indicate earnings from their main operations, are believed to have grown at Meiji Yasuda and possibly at others.
To make up for weaker domestic sales, Japanese life insurers are focusing on expanding their overseas businesses. Nippon Life's new medium-term business plan, which was unveiled just last month, calls for investments of JPY1.5 trillion in growth areas, including opportunities outside Japan. At Dai-ichi, past overseas business acquisitions helped the company achieve its sixth consecutive year of record profit.