During fiscal 2015, the year ended 31st March, 2016, the world economy initially remained on a moderate recovery track centering on the U.S. and other developed countries. However, vigor diminished from the New Year onward because of the economic slowdown of China and certain other emerging economies as well as the impact of declining oil prices.
Although the moderate recovery of the Japanese economy continued, as indicated by the upward trend of corporate earnings, growth stalled toward the second half of the year under review, affected mainly by the slowing down of emerging economies.
In the non-life insurance industry in Japan, net premiums written trended upward, primarily because of the impact of the revision of the mainstay automobile insurance products and their premium rates and last-minute demand before the revision of fire insurance products.
In the life insurance industry in Japan, the amount of new policies and the amount of policies in force both increased steadily, reflecting brisk sales of single-premium insurance products and an increase in group pension insurance contracts. Toward the end of the fiscal year, however, sales of certain products were suspended following the introduction of negative interest rates by the Bank of Japan.
The large amount of capital flowing from financial markets into the reinsurance market and the profitable performance of reinsurance companies contributed to further softening of reinsurance premium rates and conditions, and competition among reinsurers continued to intensify.
Softening of reinsurance premium rates and conditions, as well as mounting competition to win contracts, is expected to continue in the future. In addition, the need to respond to climate change, the increasing complexity of risks, and strengthened international regulations and frameworks for reinsurance are becoming more pronounced. Thus, a challenging business environment is expected to persist.