Restrictions Lifted in Japan... Active Use of Insurance Companies for Aging Population, Childcare, and Climate Crisis

Easing Insurance Regulations and Assigning Various Roles
Utilizing Insurers to Solve Social Issues
Insurers Approach with Market Expansion Goals Over Short-Term Profits

Japanese financial authorities have recently significantly relaxed regulations on the scope of insurance companies' operations and assigned various roles to them. Through this, they have decided to actively utilize insurance companies to address social issues such as population aging, regional economic stagnation, the climate crisis, work-family balance, and childcare.

According to the report "Expansion of Non-Insurance Business Scope of Japanese Insurance Companies and Implications" by the Korea Insurance Research Institute on the 9th, the Japanese Financial Services Agency significantly relaxed regulations on the scope of insurance companies' operations in 2019 and 2021, enabling Japanese insurance companies to perform various non-insurance tasks.

The Japanese Financial Services Agency first added tasks related to regional revitalization, industrial productivity improvement, or building a sustainable society to the ancillary operations of insurance companies. Specifically, it codified the possibility of ▲ management consulting and other consulting services ▲ worker dispatch ▲ design, development, and sales of systems utilizing IT and other technologies ▲ data analysis, advertising, research, and marketing ▲ user visit services for contract maintenance and management.

Additionally, insurance companies are now allowed to own subsidiaries such as companies for the advancement of the insurance business. A "company for the advancement of the insurance business" refers to a company that performs tasks utilizing information and communication technology or other technologies to advance the insurance business conducted by the insurance company, improve the convenience of insurance users, contribute or is expected to contribute to regional revitalization, industrial productivity improvement, or building a sustainable society.

Accordingly, insurance companies can now engage in fintech investments for business advancement, as well as nursing care services, healthcare services, renewable energy projects, childcare facility introduction businesses, family agency introduction businesses, and digital workforce dispatch businesses.

Through this, the Japanese government is interpreted to have expressed its intention to actively utilize insurance companies to address social problems such as population aging, increasing demand for nursing care and medical expenses, regional economic stagnation, the climate crisis, and work-family balance and childcare. It has allowed not only nursing and healthcare businesses but also renewable energy power generation and childcare facility businesses.

Moreover, not stopping at deregulation, the government has promoted smooth market operation through various support systems. For example, to reduce medical expenses, it introduced the Insurer Effort Support System and the Health Management Certification System, which strengthen the motivation for health management among individuals and companies, thereby stimulating demand for healthcare services.

In particular, some new businesses of Japanese insurance companies prioritize acquiring customer information and contact points over profit generation. The idea is to use this as a foothold to enter new markets or expand profits in existing markets. Nursing care, healthcare, and fintech investments are representative new businesses. Japanese insurance companies have actively pursued these businesses despite the need for significant initial costs and the fact that short-term profits are not expected in these areas.

The Korea Insurance Research Institute emphasized that, like Japan, Korea should consider utilizing insurance companies to solve social problems and view this as an opportunity to expand the scope of insurance companies' operations. Researcher Yoon-A Song of the Korea Insurance Research Institute stated, "As the number of middle-class elderly increases and demand for high-quality nursing care services is expected to rise, various regulations should be reviewed to induce trustworthy operators to enter the market and encourage active investment by insurance companies in healthcare services," adding, "Insurance companies should strengthen their competitiveness by expanding new businesses that can increase customer information, funds, and contact points rather than being obsessed with short-term profits."

This content was produced with the assistance of AI translation services.