According to according to Japan financial daily The Nikkei, the country’s ‘top four’ life insurers – Dai-ichi Life Holdings, Nippon Life Insurance, Meiji Yasuda Life Insurance and Sumitomo Life Insurance – generated a combined JPY14.7trn (£102bn, €117bn, $132bn) in insurance premiums in Japan in the 12 months to March 2017.
The figure is JPY2.7trn lower than a year earlier and the sharpest drop since the 2008 global financial crisis, reported the publication.
At Dai-ichi Life, aggregate premium income in Japan for its three life insurance units slumped by more than JPY1trn, according to its earnings statement.
Meanwhile, Nippon Life, Japan’s largest life insurance company, suffered a similar downturn, amounting to the worst year-on-year hit in the company’s history.
BoJ negative rates
The slump comes amid Japan’s continued lacklustre economic performance which saw market interest rates fall after the Bank of Japan adopted negative rates for the first time ever in January.
As a result, life insurers were forced to raise premiums or halt sales of lump-sum whole-of-life insurance policies. Sales of various policies via bank counters and through sales agents have also decreased.
Recently, Japanese life insurers unveiled plans to focus on expanding their overseas businesses in a bid to make up for weaker domestic sales.
Last month, Nippon Life’s said it will invest JPY1.5trn in growth areas, including opportunities outside Japan.
Meanwhile, Dai-ichi’s overseas business acquisitions helped the company achieve its sixth consecutive year of record profit, report The Nikkei.