The Latest News in Japan’s Life Insurance Market 2021: Key to the recoveryof domestic insurance business found in new mid-term management plans

FY2020 was the worst year for the life insurance industry because of the huge impact causedby the spread of COVID-19.
FY 2021, a new business year, started from April and each company announced a new midterm management plan while recovering from the sharp decline in the number of new business.
So, under what kind of management visions, what kind of strategies and tactics will life
insurance companies take to get them back to a growth track once again? Let’s take a look at
the basic stance and the new movements toward the domestic insurance business.
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Nippon Life --- Aiming for a sophisticated sales agent channel befitting the digital era
Continue to support the future of customers and society through “People, Services andDigital Technology”
This is the corporate group vision that Nippon Life tries to realize in its new mid-term
management plan, Going Beyond (2021-2023).
The company will engage in 5 key tasks to further cultivate the domestic insurance market.
One of them is to build a highly developed sales agent channel in the digital age and there
are three points as listed below.
① Increasing sales activities by enhancing digital equipment.
② Increasing contact points with customers.
③ Training personnel who can build a long, stable career with Nippon Life.
To enhance digital equipment, Nippon Life has been preparing its corporate IT
infrastructure required for its sales agents to move forward with digital activities byproviding them with N-Phone, a smartphone.
“From here on out, we will enter the phase to leverage our development of ITinfrastructure to increase sales activities. Through the tablets and smartphones provided tothe sales agents, we will further enhance both of the quantity and quality of information andconsultations for customers in timely manner,” says Nippon Life.
In addition, by proactively utilizing a screen sharing system set up at about 1,870 locations
nationwide, the company is able to close life insurance contracts non-face-to-face with

customers. Building a new type of sales activities for the next three years by flexibly
combining conventional sales visits and non-face-to-face activities, Nippon Life aims toincrease sales activities of its agents.
To increase contact points with customers, opportunities for information provision throughonline will be enhanced. A wider range of seminars such as custom-made seminars on
corporate benefits for its corporate clients or large-scale seminars will be prepared to attract
more customers. The seminars held in January 2021 recorded a total of 50,000 viewers.
Nippon Life is also preparing to launch a Small-amount and Short-term Insurance Companyto tap into a new distribution channel. A preparatory company with a capital of JPY 600 million
was established in April 2021.
It targets young people such as Generation Z which Nippon Life group companies haven’t
covered enough yet.
Sharing customer data throughout the Nippon Life Group with an optimal timing to bringout customers potential needs, the group tries to expand its customer base.
“We would like to increase the number of new customers by establishing a system to propose
unique insurance products, both life and general, within the group in a timely manner,” said
Nippon Life. As a side note, it will take more than a year for the new company to start actualoperation.
Dai-ichi Life --- Providing 4 experiential values through customer experience designstrategy
Dai-ichi Life Holdings announced its mid-term management plan, Re-connect 2023
(FY2021-2023) in March.
This three-year-period is positioned as the period to challenge transformation with resolutedetermination to secure a base for sustainable growth.
Concerning the domestic business, customer contact points will be reviewed radically. In
particular, Dai-ichi Life will provide four experiential values through its customer experience(CX) design strategy by returning to the basics of customer-oriented marketing from the one
with the perspective of product and/or channel supplier.
Each of the four experiential values is shown below:① Protection: Enhancing products, underwriting and related services to satisfy today’s
diversified lifestyle and protection needs of customers and providing them to customers intimely manner.
②Asset formation/Succession: Developing products, consulting and other related services
for asset formation and succession by taking advantages of the group.

③Health/Medical field: Challenging to the field of disease prevention and pre-symptomaticstate based on the affinity to life insurance business.
④ Connection/Ties: Creating new contact points with policyholders and insurance
enrollment opportunities through business tie-ups with external business partners.
By offering these four experiential values at a perfect timing and through an optimal channel,
Dai-ichi Life aims to reach 10 million policyholders (9 million policyholders as of March 2020)
and a top-level NPS in the industry.
NPS or Net Promoter Score measures the likelihood of recommendation of something toacquaintances or friends, and is a step further than customer satisfaction score. Dai-ichi Life
adopted NPS as an important indicator in its new mid-term management plan.
As for a new movement of experiential value in a protection field, Dai-ichi Life and Daiichi Smart Small-amount and Short-term Insurance Company together have launched a newproduct brand, Digiho. Its brand concept is “insurance to take a step forward” and main targets
are Millenials and Generation Z. An insurance product for specific infectious diseases wasreleased on April 9 as the brand’s first product.
Dai-ichi Smart Small-amount and Short-term Insurance Company underwrites the product.
The term of insurance is 3 months and a premium is a flat rate of JPY980. It adopts a dynamic
pricing strategy and a premium is set at the first day of every month based on the state of novel
coronavirus infection. JPY980 would be charged to policyholders enrolled in this April. The
benefit amount is JPY100,000.
Through the collaboration with a wide range of business partners such as freelance
communities and staffing services, Dai-ichi Life plans to actively promote Digiho, saying“New CX will be created by having our business partners utilize insurance as part of theirsubscription services.”
Regarding the sales agent system, agent recruitment and evaluation system will be drasticallyreformed so that it can evolve into a high efficiency sales channel that can deliver a high CX
based on extensive knowledge.
As for the agent evaluation system, the system for qualification and salary will be reviewed
and more weight will be placed on the indicators related to customer satisfaction. Selection
criteria and process for recruitment will be stricter and the number of new hires for FY2021
will be reduced to 70% of the previous year’s level.
For the consulting, customer contact points will be expanded through CX design system, theuse of digital tools will be also expanded, and cash-flaws and non-daily risks will be visualized
by updating life plan design [tools to customers].
Through these efforts, an individual efficiency of sales agents [revenue per sales agent] will
be expected to catch up the pre-COVID-19 level by FY 2023, the final year of its mid-termmanagement plan, and the goal for FY2026 is set as more than 20% increase of the pre-COVID19 level.
Dai-ichi Life affirms that the company emphasizes quality over quantity, allowing atemporary decline in premium income, since the next three years will be a transition period
toward a sustainable growth.
Meiji Yasuda Life --- Promoting 4 major transformation and shifting to a nextgeneration sales channel
The most accessible, industry-leading life insurer capable of “Wellness for People, Vitality
for Communities” --- Meiji Yasuda Life announced its 10-year plan, MY Mutual Way 2030, inMay 2020. The above statement is presented in the plan as its corporate vison in ten years.
The three years from FY2020 to 2022 were originally positioned as the period to secure thegrowth path for the realization of the company’s ideal image in 10 years and positioned as MY
Mutual Way Phase I. However, Meiji Yasuda Life pushed its FY2020 forward with the singleyear management plan, Special After-Sales Service Program“Always by Your Side!” becauseof the significant change in the business environment caused by the spread of novel coronavirus
infection
In response to this change, MY Mutual Way Phase I was postponed by a year and would be
implemented for the three years from FY2021 to 2023.
A centerpiece of MY Mutual Way Phase I lies in the promotion of the four major reforms.
Under these four major reforms, systems and corporate infrastructure will be developed for thephase shift to the realization of its ideal in 10 years. The reform targets to ① Sales/Services,②

Core functions/Administrative Services, ③ Asset management, and ④ Mutualmanagement.
Transition to the next-generation sales channel is emphasized for the reform ofSales/Services.
According to Meiji Yasuda Life, it would like to support QOL improvements by fulfillingnew duties, such as contributions to local communities and high standards of support forcustomer health promotion, and position advisors continually chosen by customers as rolemodels. The establishment of new sales activity model and sales infrastructure through the
combination of face-to-face and non-face-to-face is also included in the reform plan.
As for the reform of Core functions/Administrative services, a revision of digitalization andoperational rules will be carried forward. Further sophistication/optimization of administrative
operation at the head office will be promoted by drastically streamlining operations andreducing human jobs. By so doing, 40% each of administrative workloads for individualinsurance and for group insurance will be reduced.
In April, Meiji Yasuda established a new visiting service channel with 2,000 personnel.
The result that the company has successfully reduced the workload of routine administrative
operations at branch and sales offices by promoting cashless and paperless led to theestablishment of a new channel. Through this channel Meiji Yasuda will offer personalized
after-sales follow-up services for each customer by providing a precise and polite support withtechnical knowledge on administrative work and high-value-added services face to face.
Sumitomo Life --- Accelerating sales performance of Vitality after a 3-to-4-year period
to increase product awarenessTo be an “indispensable” insurance company for society --- Sumitomo Life announced its
new three-year management plan, Sumitomo Life Medium-Term Business Plan 2022 in March2020; however, due to the impact of COVID-19, a part of the plan was revised and the new
mid-term management plan was announced on September 30.
As a few reasons for revising the plan, Sumitomo Life pointed out the persisting situation
where the strength of face-to-face sales can’t reach its full potential while providing customers
with insurance, and the increasing needs for non-face-to-face communication, and the rise inhealth consciousness considering the new normal era.
Sumitomo Life’s direction of the action toward the new normal era is as follows.
①Through integrating traditional unique human value with digital technology, providing
services accommodating each customer’s situation, condition, and preferences.
②Improving Vitality in order to further support customers’ health promoting activities.
③In addition to ensuring the safety of sales agents, improving working environment tofacilitate a highly productive work style regardless of time and place.
④Shifting resources by reducing a significant amount of existing operations in preparation
for a transformation of the business model.
Vitality was introduced to the market in July 2018. A health promotion multiplier rider isapplied to existing insurance policies. Although its sales target is 5 million policies in 10 years,
there are still only a little over 500,000 policies sold.
“Japan is the 19th country to launch Vitality, and when we look at some of the advanced
examples, sales picked up the pace considerably with 3 to 4 years of building recognition period.
Generally speaking, life insurance products are said to have a product life of 2 years or so
before sales going into a stall. However, as opposed to the trend so far, the sales of Vitality
further accelerated in the third year,” said Sumitomo Life.
Vitality have been sold so far as an insurance program with a concept of health promotion;however, as a new attempt, it has started to be promoted “Insurance” and “Program” separately.
According to the new sales scheme, let potential customers try a health promotion program
first, and then lead them to enroll insurance. While it is implemented in the Tokyo metropolitanarea, the result turned out to be unexpectedly effective.
PoC of Insurance Mobility has begun as a cultivation of new customer contact points.
Insurance Mobility is a customized truck with an insurance consulting counter. The concept ofPoC is Insurance hits the street and it is scheduled to be opened at four locations in Tokyo
starting from March and ending in May.
Izumi Life Designers, a subsidiary of Sumitomo Life provides a variety of programs thatincrease health awareness, and gives a brief introduction of life insurance products to visitors
who appear to become interested in insurance.
In addition, for those who want more detailed explanations, Hoken Hyakka, an insurance
shop chain Izumi Life designer operates at 85 locations nationwide, or online consulting will
be introduced.
Sumitomo Life says “To safely provide with a new insurance experience in the new normal
era and post corona era, we’d like to make the most of Insurance Mobility.”◆◇◆

So far, we have looked at overviews of mid-term management plans for domestic business.
How about new business? How do these insurance companies view their new businessperformance in future?
It is expected that although there are certain activity constraints in face-to-face sales,
efficiency of sales activities will further advance as non-face-to-face activities utilizing digital
tools take root.
“Taking pros and cons into consideration, it may be unfeasible to get new businessperformance back to the level of pre COVID-19 era in FY2021. However, we try our best to
recover and then exceed the level of 2019 in FY2022,” ---this is the common view among
insurance companies.
Looking over the next three years, in addition to the COVID-19 pandemic, it is expected thatchanges affect life insurance business, such as a prolonged ultra-low interest rate, a more
intensified focus on customers, an advancement of super aged society, depopulation, anadvancement of digital technology, an advancement of preventive healthcare technology, andan international capital regulation will progress further.
It is no longer a time for anyone to manage a company just by following prearranged, exiting
plan against the background of a stable business environment. Under the enthusiasm that they

make every endeavor to ensure a path to a sustainable growth to be built in these three years
without being afraid of changes, but rather proactively adopting changes to solve problems,
how they demonstrate their management skills attracts attention.

About the writer:

Kenichi Suzuki is an insurance journalist working for a major insurance trade paper for 35years. From 2000 onward, he covers a wide range of insurance news including on-line lifeinsurers, insurance shops, overseas expansion of Japanese major life insurers, businessstrategies, Insurance Council, InsurTech, to name a few. He hosts a private study group,Insurance Marketing Study Group. He occasionally takes a role of a speaker for OLIS seminars
and has previously lectured at OLIS overseas seminars in Taipei, Seoul, Beijing, Bangkok andJakarta.