Press Conference by the Commissioner


May 31 , 2004


The financial results of major life insurance companies have been released. They confirmed, once again, the heavy burden of the decrease in the volume of policy contracts and the negative spread problem. What is your view on the current situation? Also, does the Government have any thoughts regarding the need to change the business model of life insurance companies, which has frequently been pointed out?


As mentioned, the volume of policy contracts decreased and the negative spread remained an issue.

However, what decreased was the total insured amount of death insurance, since the volume of policy contracts represents the total insured amount of death insurance. Life insurance companies have been actively making efforts in the so-called ''third sector'' - cancer insurance, nursing care insurance, health insurance, etc. - in response to changes in policyholders' needs. Although the negative spread still remained, the amount of the negative spread almost decreased 10% in fiscal year 2003. Further, substantial cost-cutting efforts have been made for business costs as well.

As a result of these efforts, the financial results showed that the profit from the basic insurance business operation exceeded two trillion yen. Further, the solvency margin ratio of top nine life insurance companies all exceeded 500%.

The Government hopes that they will continue to make further efforts to implement strategic management and to improve management efficiency and soundness by adapting to changes in policyholders' needs.

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