International Comparison of Life Insurers: Evolving Business Models and Financial Stability Issues

Yoshiya Ogawa, Masahiro Jimbo, Yui Matsui and Kazuaki Washimi
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Yoshiya Ogawa: Bank of Japan
Masahiro Jimbo: Bank of Japan
Yui Matsui: Bank of Japan
Kazuaki Washimi: Bank of Japan

No 26-E-7, Bank of Japan Review Series from Bank of Japan

Abstract: Life insurers manage long-term assets to fulfill long-term insurance contracts. While this fundamental function is common to life insurers worldwide, their product offerings and the assets they manage vary widely. The changing environment, including adaptation to regulations since the global financial crisis, growing post-retirement funding needs due to increasing longevity, the prolonged low interest rate environment that persisted until the COVID-19 pandemic, and the subsequent period of high inflation, has prompted life insurers to expand their product offerings and diversify their investment portfolios, including into alternative investments. More recently, the use of asset-intensive reinsurance (AIR) to enhance investment yields has been on the rise. This paper provides an international comparison of changes in the composition and scale of life insurer balance sheets in Japan, Germany, the United Kingdom, and the United States. It also examines key financial stability issues, including trends in AIR and the growing interconnectedness between life insurers and private funds.

Date: 2026-05-21
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