Recent Competition in the Japanese Life Insurance Industry

Abstract

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Efficiency in the international insurance industry: A cross-country comparison

“…In this context, it is important to recognize that the Japanese insurance industry experienced severe industrial reorganization starting from the beginning of the 1990s. The high efficiency values found in our data might thus indicate efficiency improvements as a result of this reorganization process over the last 15 years (see Lai and Limpaphayom, 2003;Souma and Tsutsui, 2005 for the development of the Japanese insurance market; Amel et al (2004) report corresponding evidence for the Japanese banking market). The lowest efficiency values are found for the Philippines (average efficiency 0.22 in non-life).…”

Degree of competition in the Japanese securities industry

“…Souma and Tsutsui (2000) concluded that the degree of competition of the Japanese life insurance industry was low, although it has increased since 1995. On the other hand, Uchida and Tsutsui (2005) concluded that the Japanese city banks were subject to perfect competition in the mid-1990s.…”

“…Uchida and Tsutsui (2005) estimated the degree of competition in the Japanese banking sector from 1974 to 2000 using a new method. Souma and Tsutsui (2000) applied a similar method to the Japanese life insurance industry for the period 1986 to 1997.…”

Has competition in the Japanese banking sector improved?

“…1 Following Clark and Davies (1982), Alley (1993) estimated the degree of collusion in the Japanese banking sector to find a high degree of collusion in 1986 and 1987. Souma and Tsutsui (2000) applied an approach similar to that of this paper to the Japanese life insurance industry from 1986 to 1997 and found that the degree of competition was low, but that the industry became more competitive after 1995 when the New Insurance Industry Law was promulgated. Kamesaka and Tsutsui (2002) estimated Panzar-Rosse's H-statistic for the Japanese securities industry and found that the industry was in monopoly equilibrium in the 1980s and was in monopolistic competition equilibrium in the 1990s.…”

“…Souma and Tsutsui (2000) found that although competition in the Japanese life insurance industry became stronger after 1995, it was still close to perfect collusion in 1997. Kamesaka and Tsutsui (2002) found that the Japanese securities industry was in monopoly equilibrium in the 1980s and was in monopolistic competition equilibrium in the 1990s.…”