Product Transitions in Japanese Life Insurance Market— Series 3: High Economic Growth Period —Japanese economy entered into a high-growth period from the mid-1950s to
the early 1970s. The annual average rate of real economic growth was roughly
10 percent during this period, and in particular it remained at 11.8 percent overthe period 1966-70 which was well known as the Izanagi Boom1. The GDP per
capita had more than doubled from 1960 to 1966 in which it was less than $500
and $1000 respectively, and further increased to $3000 in 1973.
Accordingly, the living standards of the Japanese people improved on a massscale. The home electronic appliancessuch as rice cooker, washing machine andrefrigerator came into widespread use
which was believed to have facilitatedwomen’s participation in the labour force
to some extent. The privately-owned cars
became popularized as well. Moreover, as

A Sample of Opening Commemoration
Ticket of Tokaido Shinkansen Line
(Source: Showa Day by Day, Vol.13,p.7.)

overseas travel was deregulated in 1964, thenumberofJapanesepeoplegoingabroad

continually increased.
However, the rapid economic development alsobrought about many changes and problems suchas rapid urbanization. The progress of urbanization
not only caused over-population in large cities anddepopulation in other areas, but also led to acollapse of family system and a trend toward
nuclear family. On the other hand, the proportion

1of population aged 65 or over began to show anaccelerated growth from 1960s. For instance, it was
5.7 percent in 1960, up 0.7 percent from 1950,
while it became 7.0 percent in 1970 and thenMore precisely, it refers to the period from Oct 1965 to July 1970.

1A Rush of Traffic Accidents
due to Increase in Car
Numbers(Source: Reprinted from 100
Years of History of NISSAY,
p.211.)

further increased to 9.1 percent in 1980.
Moreover, the growing popularization of private cars resulted in a rapid
increase in the number of traffic accident. For example, the number of traffic
fatalities in 1961 was 14,548 more than
two times in 1960. Also from the 1960s,
environmental destruction and pollution
problems

accompanying

therapid

economic development began surfacing
and becoming serious social issues.
Manylawsuitswithrespect

topollution-related health problems had

An Opening Ceremony Ticket of 1964
Tokyo Olympic(Source: 100 Million People’s Showa
History, Vol.7, p.81.)

been filed in the 1960s and 1970s.
It may be needless to say that risks faced by an individual or company had
become quite diversified and increased as well under these circumstances. In
order to respond various needs of customers, many new insurance products
were developed or some improvements had been made to the existing products
accordingly. For instance, all life insurance companies started offering general
accidental protection riders for all types of products from April 1964 which
covered most kinds of accidental events and were basically designed in a unified
format.
Moreover, in February 1969, all companies started dealing a universal traffic
accidental protection rider which was specialized in traffic injury or death anddesigned to meet increasing demands for
insurance against traffic accidents associatedwith the growing popularization of privatecars. Another specialized product responding
the social needs was overseas travel life
insurance emerged in September 1966 tocope with rapid increase in the number ofJapanese citizens traveling abroad after thederegulation of overseas travel in 1964.
On the other hand, there was increasingneeds for annuity insurance in pursuit of2

A Brochure of Endowment Policy
with Term Rider: Receiving
Threefold Death Benefit. (Source:
110 Years of History of Meiji Life,p.145.)

old-age income security despite the fact that the national pension system was in
the progress of construction after the National Pension Law was put into effectin April 1961. In particular, corporate annuity insurance had been regarded asa means for securing enough labour force and/or high-quality labour force dueto the labour shortage accompanying high economic growth. On the contrary,
the market for individual annuity insurance had been sluggish until themid-1980s, although the so-called pension-type life insurance products
increased rapidly which generally refer to the policies in which the sum insured
will be paid in the form of pension by an annuity rider.
In the personal lines, however, the leading product was still the type ofordinary endowment insurance in the 1960s, in spite of the fact that a gradualshift in customer needs from living benefits to death benefits had occurred. Inorder to adapt to the changes, insurance company developed a type of term
endowment insurance in which policyholder can havemore chances to obtain the best combination ofdeath security and existence security for herself
by adding a term rider to an endowment policy.
This type of product was first developed by
Nippon Life in July 1959, which was so-called
Kurashi no Hoken, and then spread over theentire industry in the late 1960s.
Furthermore, in pure endowment insurancelines, saving-type products were most popularand mainly handled by small and mid-sizedcompanies

duringthisperiod.

Juvenile

A Popular Tool for Sales
Promotion of Kurashi noHoken(Source: 100 Years of Historyof NISSAY, p.210.)

insurance was the second most popular pure endowment insurance productwhich had been improved to meet the needs of covering increasing education
expenses since many companies started putting more emphasis on academic
background and qualifications associated with the rapid economic development.
The biggest improvement was a cash gift delivery policy when the insured enterssuch as junior high school, high school and/or college.

(YingYing Jiang, Ph.D. in Commerce of Hitotsubashi University)

3

To be continued…