The Latest News in Japan’s Life Insurance Market 2020: How life insurancecompanies survived the COVID-19 stricken first half of 2020---A sharp
decline in business performance and a new experiment in sales model

Decline in the number of new business by 35% but back on track after July
For the life insurance industry, the first half of 2020 (from April to September) was full of
uncertainty of how far the business performance would fall due to the self-restraint request on
sales activities under the COVID-19 outbreak.
The data released by the Life Insurance Association of Japan on December 2, 2020 showsthat the impact COVID-19 brought to the industry was unprecedented. The new businessresults for individual insurance are as follows.
Number of Policies: 6.74 million（-35.6％, year-on-year）。
Insurance Amounts: JPY19, 732 billion（-22.0％, year-on-year）
Annualized Premiums: JPY564 billion（-30.7％, year-on-year）。
The number of new business and the amount of annualized premium significantly declinedby the 30% range, and their uncertainty became reality.
Let’s further look at the number of new business by month.
April: 990, 000（-34.4％, year-on-year）
May: 510,000（-68.5％, year-on-year）
June: 1,000,000（-55.4％, year-on-year）
July: 990,000（-44.6％, year-on-year）
August: 1,290,000（-14.3％, year-on-year）
September: 1,960,000（+9.5％, year-on-year）
The number of new business in the first quarter of 2020 (from April to June) was affected
greatly by the temporary suspension of sales activities for new business due to the state ofemergency declared nationwide and it resulted in the sharp drop in May, 68.5％ decline yearon-year, and the trend continued into June.
Life insurance companies positioned July as a phase to revert their sales activities back to
the level before the emergency declaration and resumed their face-to-face sales activities withthe customers who agreed to meet with them face-to-face.
With the face-to-face sales activities returning to normal, the number of new business hitting
the bottom in May recovered in September, the sales exceeded that of the same month last year.
How do life insurance companies perceive the business results in the first half of 2020?
“When it comes to the annualized premium, number of policies, and face amount for newbusiness, they declined because of the drop of sales between April and June when we voluntaryrefrained from sales activities. Although it has been recovering since July, it gravely affected
the business and resulted in the negative during the first half year.”During the financial result briefing for the first half year on November 24 last year, Nippon
Life Insurance Company summarized the new business performance as above. Breaking down
its total annualized premiums for the first half of the year, which is JPY114.8 billion, by
quarterly, the amount increased from JPY 39.3 billion for the first quarter, 63% decline yearon-year, to JPY 75.5 billion for the second quarter, 24% decline year-on-year.
Other life insurance companies also have confidence on the gradual recovery trend andcommented as follows.
“We voluntarily refrained from sales activities companywide in April and May last year, andgot back to business in the areas except 19 prefectures in June. We have been gradually resumed
face-to-face sales since July and the level has returned to the one before the coronavirus spread,”said Meiji Yasuda Life Insurance Company.
Sumitomo Life Insurance Company said, “The annualized premiums for the new businessin the first quarter decreased by 26.0% on year-on-year basis due to the drop in sales led by thevoluntary restraint on sales calls and the decrease in the number of customers visiting ourinsurance agencies.”
While the performance result for the new business significantly declined, each life insurancecompany’s annualized premiums and face amount in force, on the contrary, only slightlydecreased. This is because that the in-force amounts are mostly composed of existing policiesso the loss of new business had little effect on them.
“Stress test was undertaken to assess the level of solvency margin ratio under the worst-casescenario, and we concluded that the profit structure would be maintained without taking any
special measures. Sales measures are determined accordingly.”
Fukoku Mutual Life Insurance Company shows confidence in its business operation carriedout soundly.
Full utilization of LINE WORKS for non-face-to-face activities
How to increase the number of customer touchpoints---in the midst of COVID-19 pandemic,

even after life insurance companies resumed their normal operation, this is on the top of theiragenda and each company has worked on it, repeating trial and error.
① How to construct non-face-to-face activities without meeting customers directly.
② How to combine newly adopted non-face-to-face activities with conventional face-toface activities to bring out the most productive result.
These are the some of the points and utilization of digital tools is the key to non-face-to-faceactivities. Let’s look at Nippon Life’s example.
Last April: Providing sales agents with N-Phone come with the function to look atpolicyholder information, LINE WORKS to manage a schedule, and so on. Through LINE
WORKS, sales agents can exchange text messages with policyholders.
June: Installing educational application on N-Phone. Sales agents then on can browse a wide
range of educational materials. A sales roleplay exercise function by which AI automaticallyjudges the effectiveness of agent’s proposal was added to N-Phone.
July: LINE ID collection campaign.
September: Installing LINE WORKS on sales agents’ TASKALL tablets and also adding afunction to send insurance proposals.
November: Enabling to send digital product brochures to policyholders and potential
customers through LINE.
Nippon Life put a lot of effort into functionality of a smartphone. Behind this is the increasein the number of smartphone application users in April and May by 47.5% compared to thesame period last year because of COVID-19.
Last August, Nippon Life provided exclusive services for policyholders and added a push
notification function and redesigned its website to a mobile friendly one in December.
Another help line will be added by March.
A one-stop service which enables customers to do any paperwork and contact a sales agent
in charge, Nissay Life Plaza, and a call center will be available in the future.
As such, Nippon Life is proceeding with the projects to diversify digital contact points andtrying its best to strengthen the relationship with its customers.
Fukoku Life added WebX, a web conferencing application, to its sales agents’ tablets called
PlanDo in late May. The application was used for employee gatherings such as morning
assemblies, meetings and trainings by September but it has started to be used for meetings withcustomers as well since September.
Fukoku Life has been focusing on digital marketing on educational endowment insurance
since 2019. Favorable results have appeared to be brought by online meetings with customers
little by little.
Digital marketing for educational endowment insurance is completed with agents visiting

the customers who requested product information materials through website after making an
appointment with them.
“However, if there isn’t enough relationship built between a person who requested materials
and a sales agent, it is most likely that this potential customer refuses to meet the agent inperson under the COVID-19 pandemic. To avoid this kind of opportunity loss, online meetinghas been brought in. Through the online session, an agent thoroughly explains insurance
products and concludes a contract without meeting in person,” said Fukoku Life.
A monthly number of new business for educational endowment insurance products isbetween 2,000 and 3,000. 200 to 300 contracts, 10% of the total monthly contracts, are throughdigital marketing and furthermore, 20 ~30 contracts, another 10% of contracts through digitalmarketing are concluded through online meetings, which are expected to increase in the future.
Digital brochures help customers better understand products, hence a better sales
efficiency
Contacting policyholders or potential customers, making appointments with them, and thenvisiting them---these were the sales procedures taken by Meiji Yasuda Life. However, thecompany has been producing better results taking following sales activities, by adding nonface-to-face sales activities to the conventional sales procedure.
① Contact policyholders or potential customers, who have already been acquainted, throughLINE or email.
② Provide digital brochures to policyholders or potential customers who ask for information
first.
③ Policyholders or potential customers check products by going through brochures inadvance.
Meiji Yasuda emphasizes its success as “Because the customers have preliminary knowledgeof the products, the meeting time gets shorter, so that sales efficiency goes up.”
Life insurance companies have started to experiment in a sales meeting with customers bybringing in specialists in tax, finance and underwriting section of a headquarter to a meetingwith digital tools.
The assist offered by the head office in providing non-face-to-face support to the sales
section will produce a higher level of consulting to customers, which in turn will result in better
customer satisfaction---is what Meiji Yasuda is expecting.
Moreover, remotely supporting sales agents through online has another benefit in a support
cost compared to conventional supports such as accompanying a sales agent. It will further beenhanced from the perspective of efficiency in support cost.

While more weights tend to be put on non-face-to-face sales activities, Sumitomo Lifeemphasizes on the value rooted in people once again.
“It is not just about adopting digital tools or being able to use them. The important thing isthat even without meeting in person, we will deliver the customers the same value of being
close to customers and supportive, just as always,” said Sumitomo Life.
Since life insurance has different roles and values expected by customers depending on theirlife stages, there are still customers' strong needs of meeting in person with sales agents wholisten to them and propose the most ideal plans accordingly. After the face-to-face activities
were resumed in July, the number of customers requesting for in-person meetings have beenincreasing.
Even in the post corona environment, the importance of face-to-face meetings will remain
the same. That being said, however, online meetings will never be removed completely.
Non-face-to-face activities by using digital tools exhibit the advantages in preventing corona
virus infection and increasing in sales efficiency.
In the context of it, “To find the exquisite combination of non-face-to-face activities with
face-to-face activities according to need of each customer is the key,” said Nippon Life.
And so, sales agents are expected to improve IT skills and literacies as well as consulting
skills backed by advanced knowledge.
Producing 80 video clips of training materials to increase learning opportunities
Along with the changes in lifestyle due to the spread of coronavirus, the way of training sales
agents saw changes as well.
Sumitomo Life adopted CloudCampus, an e-learning platform, in September and video
viewing is available to sales agents by smartphone.
It aims to create learning opportunities regardless of time and place by streaming video
contents made at a head office to sales agents. Sumitomo Life says “While we try to realize
efficient working style and to bring up employee’s skills and knowledge, at the same time wework further to improve our productivity.”
Moreover, training format has changed from the group training led by branch offices at theireducational base to the training led by a head office using digital tools.
Fukoku Life prepared training videos for sales agent’s PlanDo tablets. 80 five-minute-video
clips called Fukoku Microlearning were prepared just in half year.
Last April and May, the time sales agents spent working from home became the time ofleaning not only insurance knowledge but also taxes and finances by watching training video
clips.

On the other hand, while most of group trainings were restricted, online training sessions
through Zoom are held. The new fact has come to light.
Online training is very effective for imparting knowledge; however, face-to-face grouptraining is more effective for deep discussion among participants.
Fukoku Life will provide trainings through online and gatherings by making the mostadvantages of both training formats.
Now, since last December the third wave of coronavirus infection has been uncontrollable.
Japan reported 7,800 new cases of COVID-19 nationwide on January 8 and it was record high.
Following the rapid outbreak of COVID-19, on January 7, the state of emergency wasdeclared to Tokyo, Kanagawa, Saitama and Chiba prefectures from January 8 to February 7.
Even if face-to-face activities is restricted just like when the state of emergency issued inApril and May last year, the business won’t be crumbled like it did during the first quarter of2020 since the life insurance industry learned lesson and accumulated know-hows on non-faceto-face activities using digital tools.
Sumitomo Life made predictions that on the assumptions that the business restrictions andstagnation of economic activities remain the same level for the second half of the fiscal year,
the amount of new business annualized premiums for the entire Sumitomo Life groupcompanies will drop by just around 10%.
For the life insurance industry, uncertainty still remains for FY2020 (April 2020~March2021).

About the writer:

Kenichi Suzuki is an insurance journalist working for a major insurance trade paper for 34years. From 2000 onward, he covers a wide range of insurance news including on-line life
insurers, 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.