Product Transitions in Japanese Life Insurance Market--Series 1: Pre-World War II Period--

The life insurance products provided by the pioneering Japanese companies werevaried in 1880s and 1890s, which can be categorized into four types, namely whole-life
insurance, term life insurance, endowment insurance, and pure endowment insurance1.
More specifically, the pure endowment insurance mainly consisted of educational
endowment insurance and dowry insurance. Among these products, the kinds ofwhole-life insurance policies were soldrelatively well, whereas the kinds ofterm insurance policies did not. It is also
notable that the types of without-profit
policies were the mainstream during
this period.
The types of endowment insurance
policy, however, gradually took the placeof the types of whole-life insurance
policy as saleable products from theendof1890s.

This

trend

The First Life Insurance Policy by the FirstJapanese Life Insurance Company, Meiji Life.
(Source: 110 Years of History of Meiji Life, p.33.)

wasaccelerated by the emergence of mutual companies which appeared first in 1902 andthen in 1904, namely the establishment of Dai-ichi Life and Chiyoda Life respectively.
The major products sold by these companies were the types of with-profit endowment
policy.
As is well known, the endowment policy is a typical type of life insurance productwhich combines compensation feature and savings feature together by promising thepayment of a stipulated sum not only upon the death of the insured during the contract
period but also upon his survival at the end of the contract period. These features canmake the endowment policy attractive especially in a nascent market.
Moreover, the endowment policies sold by the mutual companies of the time were allwith-profit types which enabled the policyholders to have an opportunity to share thecompanies’ profits. In addition, these companies had increased the policy dividend rates
for several times in order to compete with each other and also their stock company
There were also conscription life insurance products sold by four conscription life
insurance companies, industrial life insurance and postal annuity products developedby the Ministry of Communications which we shall not discuss here.
1

rivals.

Suchproductstrategies

hadcontributed

significantly to the rapid growth of the mutual companies.
Responding to this situation, the other companies shifted
their main products from the whole-life insurance to theendowment

insurance

policies

andfromthewithout-profits to the with-profits types. As a result, thetypes of with-profit endowment insurance policy became
the mainstream products since the late 1920s.
On the other hand, the sales of term life insurance
types were terminated in the early 1910s. Since then,there was only one company named Toyo Life once tried
to sell this kind of products in 1933 but ended up infailure as well. In contrast, there were more than tencompanies, including four conscription life insurance

A Booklet Introducing theNewly Added Products ofNipponLifesuchas
EducationalEndowment
InsuranceandDowryInsurance.
(Source: 100 Years ofHistory of NISSAY, p.65.)

companies and one specialty company, had been selling the types of pure endowment
insurance policy despite these products never accounted for a large portion of thepre-WWII life insurance market.
Most of pure endowment insurance policies had thereturn-premium privilege but without an interest,
whereas few companies promised to deliver a full-refundwith a compound interest when the insured, basicallythe child, died before reaching the endowment age. Also,
there were very few companies which had been sellingthe with-profit types of pure endowment product until
the end of 1920s, and indeed achieved rapid growth.
However, the pure endowment insurance products werebecoming more standardized in the early 1930s, andmore companies started to sell the with-profit types.
Providing Is Preventing.’ - A
Poster Publicizing Life Insurance
by Daido Life
(Source: Daido Life – 100 Years ofChallenge and Creation, p.36.)

Consequently, the market size of pure endowment
insurance policies expanded significantly during thelate 1930s.

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