Business of Foreign Life Insurance in Japan--- Series 1: The Emergence ---The first appearance of foreign insurance companies in Japan can be traced
back to 1859 when foreign settlements started to appear in the designated ports
for foreign trade such as Yokohama Port and Nagasaki Port following theconclusion of the Treaty of Amity and Commerce between the United States andJapan. By 1900 when the Insurance Business Act came into force, all thecompanies conducted their business via agency channels, which basicallyconsisted of foreign merchants in the settlements and a few domestic trading
companies since the mid-1870s. As regards business line, most companies werespecialized in nonlife insurance and a few companies had been selling both life
insurance and nonlife insurance. There were very few companies specialized inlife insurance business.
For instance, according to The Daily Japan
Herald and The Japan Mail Daily Advertiser - bothadvertisement-oriented newspapers founded in Oct
1863 and September 1865 respectively - there were
5 companies selling both life insurance and nonlife
insurance, and only one company specialized in life
insurance among more than 40 companies during
1874-1875.1 However, it is difficult to ascertain theexact number of companies and their businessperformance in each line in these early years due tolack of reliable official statistical data that. Suchinformation only became available from 1906
onwards when The Insurance Year Book edited by
the then Department of Agriculture & Commerceand published by the then Association of JapaneseLife Insurers was launched.
Moreover, life insurance provided by those

The first advertisement towards
Japanese citizens by Provident
Clerks’ Mutual Life Assurance
Association in TOKIO TIMES: “Theundersigned having been appointed
Agent for Japan / is authorized toaccept Proposals at Home Rates /Jno. W. Hall Yokohama, January
1877.” For more information, seeHistory of Japanese Life InsuranceIndustry, p.24.

The five companies are Royal Exchange Assurance Corporation, Northern Fire and Life
Assurance Company, Guardian Fire and Life Assurance Company, North British and Mercantile
Insurance Company of London and Edinburgh, Scottish Imperial Insurance Company London(Fire, Life and Annuities). The company specialized in life insurance is New England Mutual Life
Insurance Company, an American company established in 1835. For more information, seeHistory of Japanese Life Insurance Industry, pp.22-23.

1foreign companies had been only available for foreigners living in thesettlements at least until 1877 when Provident Clerks’ Mutual Life Assurance
Association, a British company established in 1840, started advertising toJapanese customers in newspapers such as Tokio Times, Yomiuri Shimbun andTokyo Nichi Nichi Shimbun. However, foreign companies’ interest in developing
Japanese domestic life insurance market was not likely to be so strong at thetime. Most of them set up their base camps in the settlements especially inYokohama and were reluctant to develop a nationwide business until 1888,
when New York Life Insurance Company, an American company established in1841, started advertising aggressively after appointing Mitsui Bussan as its
agency for the domestic business in January of that year. In order to gain thecredibility of potential Japanese customers, the company declared in its
advertisement that its premium income would be invested in Japanese
government bonds and deposited with the Bank of Japan.
On the other hand, to Japanese entrepreneurs, life insurance businessseemed to lack attractiveness. Only four domestic life insurance companies had
been established till the end of the 1880s. 2 Yet in the 1890s with thedevelopment of capitalism in Japan, an investment boom in life insurance
business occurred. In response to the boom, the government began tostrengthen the supervision and regulation of insurance business. Such changes
in regulatory policies had enormous impact on the foreign insurance companies.
In our next report, we will discuss this issue in more detail.

To be continued…
YingYing Jiang, Ph.D.

The four companies are Meiji Life established in 1881, Teikoku Life (1888), Nippon Life andDainippon Life (1889).

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