Startup business in the life insurance industry in Japan
Let’s look at the startup business in the life insurance industry in Japan.
The development of health-promotion type insurance
A health-promotion type insurance is an insurance product which offers discounts onpremiums, premium refunds or increase in insurance money by the insureds performancefulfilling the health requirement set forth in the policy. In Japan, this type of insurance isfound mainly among medical insurance products and they are developed with the conceptof early detection of decease through routine and medical checkups, or reduction ofmedical costs by improving lifestyle.
Typical product examples are listed below.
・ Aruku Hoken (Tokio Marine & Nichido Life Insurance Co., Ltd.)This is medical insurance that returns a portion of insurance premiums topolicyholders corresponding to the count of steps. The more period of time during
which the average steps per day exceeds certain numbers, the more refund (cashback).
・ Vitality (Sumitomo Life Insurance Company)
This is medical insurance incorporated Vitality, a wellness program developed by aSouth African company Discovery Limited, which evaluates and gives points toactivities such as medical checkups or physical exercises.
Moreover, some products were developed with the concept of prevention of worseningdiseases.
・ Supporting the prevention of serious symptoms rider (Meiji Yasuda Life InsuranceCompany)
This is a rider that pays the insurance money for the prevention of serious symptoms
when the symptoms of any seven specified lifestyle-related diseases (heart disease,cerebrovascular disease, diabetes, hypertensive disease, renal disease, liver disease,pancreatic disease) show the prescribed condition.
・ Counseling services to prevent aggravation and relapse (ORIX Life InsuranceCorporation)
This is a service provided to policyholders who have received insurance money forthe specific diseases such as acute myocardial infarction and cerebral infarction toprevent aggravation and reduce the risk of relapse.
Upon completing hearing a customer’s medical history and condition after surgery
in details over the phone, qualified staff, such as public health nurses or registerednurses, give some advices over his/her lifestyle including diet, exercise and smoking
habit and continuously support him/her.
Policy purchasing (viatical and life settlements) businessIn a viatical settlement, life insurance policies are purchased from policyholders who areseverely ill such as becoming cancer and in need of substantial amount of money to cover
medical and living expenses. They might have a difficulty to pay for premiums at thesame time.
Purchase amount is more than a cash surrender value and less than death benefit.
Generally speaking, it is the four times the cash surrender value amount in Westerncountries, including contracts of healthy policyholders. Purchasing amount will be higherif a seller’s medical condition is severe. After selling insurance policies, in principle,
policyholders owe nothing to either life insurance companies or policy purchasingcompanies.
These settlements require consents from stakeholders such as families or current
beneficiaries.
When a life insurance company received an offer to purchase a life insurance policy forthe first time in Japan, the company didn’t agree with it, raising moral issues and soughta judicial determination. The court ruled in favor of the life insurance company andconcluded “If we left the transferring life insurance policies to take its own course,
without interference, there will be concerns that purchasing companies will purchasepolicies from financially struggling policyholders and the elderly at unreasonably low
prices. There are also concerns over fraudulent transactions and the risk of becoming
funds for organized-crime groups.”
When the insurance law was amended, any unclear part of purchasing life insurance
policies was improved and it became legally allowed in Japan finally.

Utilizing Health Insurance Claim data
Japan’s social insurance system was developed under the principle of universal coverage.
As for the national health insurance, which covers medical expenses for injuries anddiseases, there are the following schemes depending on the insurers and the age of theinsured.
SchemeInsurer

Insured

Health Insurance Union

Company

National Health Insurance

Municipality

Self-employed
74 y/o and under in principle

Advanced Elderly Medical
Service SystemPrefectureOver 75 y/o in principle

Employees and their families
64 y/o and under in principle

Health insurance claim data is personal information data issued by medical institutions
to insurers to claim medical expenses covered by insurance. The companies processing
and anonymizing the data and providing it to the third parties, such as life insurancecompanies, with the permission for the secondary use of data have been established. Life
insurance companies utilizes this data for underwriting or product developments.
Oriental Life Insurance Development Center bears sole responsibility for the contents ofthis article.