FOREIGN ASSURERS SEE 8% GROWTH IN JAPAN

Non-Japanese life assurers in Japan generated premium growth of 8% to the year ended March 31, reaching ¥8.16tn, reports this morning’s Nikkei . The growth rate was a slow down from 2004/05, when a 38% increase on the previous year was achieved. The major cause was a fall off at the retail level of products such as variable annuities. Hartford Life KK reported a 13% increase in premium revenue, while the previous year it had grown by 137%. At ING Life there was growth of 6%, down from an 82% improvement between 2003/04 and 2004/05. Domestic assurers such as Nippon Life and Sumitomo Life have improved the sales of such products through bank branches, taking market share from the foreign assurers that have tended to lead in such products. AIG’s three Japanese assurers, led by ALICO, saw premium revenue drop a combined 13%. The company was reportedly hurt by a weakening yen over the year, which caused the cost of dollar-denominated products to rise. Foreign assurers are now generating about a third of the life-related business revenue in Japan. With domestic assurers generating premiums of ¥18.06tn last financial year. The foreign players’ core operating profit was up 30% to ¥475.2bn, but their margins remain below that of Japanese assurers, who generated ¥2.2tn  in profit — more than four times the gain on roughly twice the level of premiums.