Japanese personal accident and health (PA&H) insurers have started offering insurance policies covering seasonal illnesses. Given a persistent decline in premiums due to challenging economic conditions, the move is expected to help the country’s PA&H insurance industry to boost revenue growth, says GlobalData, a leading data and analytics company.

As per GlobalData’s insurance database, Japan’s PA&H insurance segment is expected to grow at a compound annual growth rate (CAGR) of 1.7% from JPY914.2 billion ($8.3 billion) in 2021 to JPY992.4 billion ($10.2 billion) in 2026 in terms of direct written premiums (DWP). The PA&H insurance industry is estimated to grow by 1.3% in 2022 and 1.4% in 2023 after declining by 1.7% in 2021.

Manogna Vangari, Senior Insurance Analyst at GlobalData, comments: “The Japanese PA&H insurance market has been witnessing fluctuating growth since 2020, due to economic contractions following the outbreak of the COVID-19 pandemic. Further, rising inflation, which reached its highest levels in the last 41 years in November 2022 due to the ongoing Russia and Ukraine war, has decreased consumer disposable income and negatively impacted the sales of PA&H insurance policies.”

Despite the negative outlook, insurers are diligently pushing to create new opportunities, explore niche markets, and innovate their product portfolios to match changing market needs.

The Japanese government has also been testing innovative projects in the field of healthcare under its sandbox program, which encourages insurers to experiment with their product portfolios by accelerating the regulatory approval process to launch new products.

Manogna continues: “Japanese insurers have been quick to react to the changing market trends and offer health insurance products that are simple and effective.”

For instance, seasonal flu cases in Japan have increased sharply since November 2022, and the Japanese health ministry declared it an epidemic. By the first week of February 2023, Japan had registered 301,000 flu patients, an increase of 14,000 from the previous week.

To address this, Sumitomo Life Insurance and Z Holdings started offering low-cost “Influenza Insurance” in January 2023. This insurance policy covers flu medication with premiums as low as $1.90 to $2.70 per month for people above 20 years, and premium of $2.90 to $8.20 per month for those aged 10 to 19 years.

Similarly, many other Japanese insurers, including Sompo Japan and Sumitomo Life Insurance Company, started offering heatstroke insurance policies following an increased incidence of heatstroke that led to emergency treatment for 14,000 individuals in the summer of 2022.

Manogna concludes: “The launch of low-cost seasonal insurance products will give boost to the Japanese PA&H insurance industry and help it maintain steady growth over the next five years. This will also create niche business which insurers can then replicate across other geographies.”