As the year 2025 unfolds, I would like to express my heartfelt greetings for the season.
Last year, similar to past few years, Japan was struck by a series of natural disasters such as the 2024 Noto Peninsula Earthquake on New Year’s Day and heavy rains throughout the country. We pray for those who may have been impacted by the catastrophe and a rapid recovery. The life insurance industry will continue to provide support to everyone in need.
Despite the damages from natural catastrophes, the Japanese economy showed strength and exited from deflation which shed a light to “a virtuous cycle of growth and distribution” this year. Specifically, the Bank of Japan raised the policy interest rate back to above zero for the first time in 17 years, the Nikkei Stock Average marked a record high for the first time in 34 years, and the wage increased by more than 5% for the first time in 33 years.
The society and economy will keep on evolving as we move forward. Even in the midst of continuous change, it is the life insurance industry’s public mission to provide persistent peace of mind to the customers and, to maintain close relationship under the belief of mutual aid. With this strong determination in mind, we will continue to proceed with our proactive approach for the year 2025, focusing on the following three pillars of action that I highlighted upon becoming chairperson in July 2024.
1. Promotion of customer-first business operations
In order to fulfil the public mission of the life insurance industry, to deliver unwavering peace of mind to customers, the most important point would be to focus on conducting “customer-first business operations” by pursuing customers’ best interest. The LIAJ will continue to promote member companies’ efforts with the lead of their management team.
As for the distribution and management of foreign currency-denominated single premium insurance products, the LIAJ conducted follow-up activities including surveys and dialogues, with the aim of disseminating and establishing measures taken by member companies based on the updated guidelines dated April 2024. The LIAJ will hold another dialogue among representatives of the member companies in February 2025.
The LIAJ also conducted a follow-up survey on “Viewpoints for Further Enhancement of Compliance Risk Management Structure Related to Direct Salesperson Channel” in October 2024 to verify the member companies’ implementation status and improvement measures. Based on the survey results, dialogues will be held with member companies’ executives (February 2025) and representatives (April 2025).
2. Initiatives to support people leading a thriving life
In order to have a long thriving life, it is important to make a life plan, learn about health promotion, asset formation, risk preparation and take actions according to personal values.
The LIAJ has been committed in enhancing people’s understanding on the importance of self-help and the need for appropriate combination of self-help, mutual assistance and public assistance by producing educational materials and videos on insurance.
Given that the Japan Financial Literacy and Education Corporation has been active since August 2024 and the comprehensive collaboration agreement on insurance education concluded with the General Insurance Association of Japan and the Japan Institute of Life Insurance, the LIAJ will develop a medium to long-term action policy to further enhance its commitment on insurance education.
Another initiative taken was the establishment of the “LIAJ scheme” to further encourage the use of the Public Key Infrastructure in the life insurance industry and to provide easier access to customers. It was developed with the help of system vendors by setting common specifications to enable bulk system development for multiple life insurance companies, resulting in the reduction of programme development cost on individual insurance company. The LIAJ will continue to provide services which will benefit customers.
3. Initiatives for the realisation of a sustainable society
In a time where social issues such as climate change are on the rise, we recognise that life insurers are expected to further fulfil its role from both aspects, as a responsible institutional investor with total assets of approximately JPY400tn and as an operating company distributing insurance.
In September 2024, I represented the LIAJ at an event held during Japan Weeks and gave a speech on “the Role of Life Insurance Companies for Realisation of Leading Asset Management Centre” to share the LIAJ’s efforts on the topic.
Japan’s life insurance industry will continue to promote and actively communicate efforts contributing to the stimulation of the financial/capital market, which is advocated in the government’s policy plan for promoting Japan as a leading asset management centre. Also, we will play an increasing role in the realization of a sustainable society through supporting the improvement of investee company value through ESG investment/financing and stewardship activities.
The LIAJ will continue to release SDGs-related information by updating its “Handbook for the Solution of Environmental Issues” with the latest developments and organise workshops for member companies to share information. Furthermore, the LIAJ will communicate with customers to enhance their understanding about the efforts of the life insurance industry on SDGs with informative materials. In addition to the three pillars of action above, we will continue to foster an environment that maintains the trust of customers and the sound development of the life insurance industry.
Finally, I would like to mention that 2025 is the year of the snake in the Japanese Zodiac. The Chinese character signifying “snake (?)” is said to originate from the shape of a baby in the womb, which signifies “expectation of the future.” Right at this time, the FY2025 Tax Reform Proposal released by the administration party in last December announced the expansion of the life insurance premium deduction for the FY2026 income tax, intended for the child-rearing generation who will bear the future of our country. As the chairperson of the LIAJ, I will continue to commit myself to passing down a hopeful society to the next generation.
I would like to conclude my New Year message by wishing everyone a peaceful 2025.
Mr Hideki Nagashima is the chairperson for the Life Insurance Association of Japan