life insurance marketing: consumer behavior …life insurance marketing: consumer behavior approach...

Life Insurance Marketing:

Consumer Behavior

Approach

By Tomoki Inoue

Public Interest Incorporated Foundation

Oriental Life Insurance Cultural Development Center

Tokyo, Japan

i

Preface

In Japan, where the society faces serious depopulation with ongoing aging

and a declining birthrate, life insurance companies are confronted with the

structural changes of a shrinking market and shifting needs for security. The

sales agent channel that had for the longest time claimed a dominant presence

as the sales channel for life insurance is losing contact with consumers, since

fewer people are at home during the daytime in light of the rise in

double-income families and due to more restrictions on solicitation activities in

the workplace against the backdrop of an increased awareness of the dangers of

information leakage. On the other hand, new channels have come onto the

scene, including direct sales channels, mainly online life insurance companies,

and independent insurance shops handling products from different insurance

companies leading to the rapid diversification of sales channels in the life

insurance industry over the past decade or so. Meanwhile, the asymmetric

nature between the seller and the buyer in terms of the predominance of

information is rapidly disappearing with the advances in information

technology and the spread of the Internet among general consumers. The days

when it was said "life insurance is a product that is necessary but faces weak

demand; therefore, consumers cannot recognize the necessity of life insurance

unless the needs are aroused through push-strategy channels” are long gone,

and there seems to be more and more consumers who are aware of their need

for security, examine proactively, and make the decision to purchase insurance.

In order for the life insurance industry to accommodate such changes on the

consumers’ part, it is necessary to first deepen our understanding of the actual

actions of consumers, namely the actions they take when examining the

possibility of taking out life insurance and their thinking behind these actions.

This book is based on an article published in a 33-article series in the insurance

industry newspaper, Insurance Scoop, between March 2009 and October 2013.

In Part 1, the details of consumers’ actions and thoughts are shown in line

with the framework explaining the purchase process of general goods and

services with a focus on the decision-making process and series of actions

consumers take when getting a life insurance product. In the chapters of Part 1,

the specific actions and thoughts of consumers in the various stages of the

purchase process are explained. However, there is no chapter to outline the

overview of the purchase process as a whole. This is out of the concern that

providing an outline might rather end up distorting the recognition that

consumers are diverse. I hope the reader will grasp the big picture of the

purchase process from reading through Part 1.

In Part 2, the characteristics of consumer segments classified into

subdivisions according to various axes are explained with a focus on consumer

ii

heterogeneity. As mentioned above, consumers are diverse. Moreover, we talk

about life insurance as such; however, products to provide compensation for

bereaved families and those for medical security or old-age security have

different elements to be considered when making the decision to purchase,

including marketability or other methods of preparation that may serve as

alternatives. The hope is that revealing the differences and similarities among

consumers or product types will serve to deepen the understanding towards the

consumer life insurance purchase process as set forth in Part 1.

As the environment surrounding consumers and the consumers themselves

have changed since this text first started to be serialized in Insurance Scoop, I

have updated the various statistics and figures to the most recent reports

available and significantly revised some of the expressions. Furthermore,

statistics that had been omitted due to space constraints in the original

publication have all been added. Individual data from the quantitative survey1

conducted in January 2013 by the NLI Research Institute, to which the author

belongs, is used for the analyses in this book unless specifically stated

otherwise.

I would not have had the opportunity to systematically rearrange this

literature had my series of articles that was merely collected into three

brochures gone unnoticed. The English edition based on this rearranged paper

could not have been published without the tremendous support of the Oriental

Life Insurance Cultural Development Center. I note here my deep gratitude.

It will be my great joy if this book would serve to deepen the readers’

understanding of the Japanese life insurance market and consumers, and

furthermore be useful to understand the consumers of your own country by

reflecting on the differences between our market and yours.

September 2014

Tomoki Inoue

1 The outline of the survey is as follows.

Survey subjects: men and women between the ages of 20 and 69 (panel registered with survey company) Survey method: online survey. Number of valid data samples collected: 5,309 respondents (of which 4,021 were policyholders and 1,288 were non-policyholders)

iii

Tomoki Inoue

Analyst

Social Improvement & Life Design Research Department

NLI Research Institute

Specializes in consumer behavior, financial marketing.

2003 Completed the Systems Management Masters’ Program

(MBA) at the Graduate School of Systems Management,

University of Tsukuba

1995 Joined the Japan Institute of Life Insurances

2004 Joined NLI Research Institute, Social Development Research

Department

Since 2006 Transferred to the Social Improvement & Life Design

Research Department within the NLI Research Institute

(concurrent position as part time lecturer at Toyo University

and the University of Yamanashi)

2003–2009 Part-time lecturer at Seijo University, Faculty of Economics

Since 2006 Part-time lecturer at Toyo University, Faculty of Economics,

Since 2010 Part-time lecturer at the University of Yamanashi, Faculty of

Education and Human Sciences

2011–2012 Part-time lecturer at Hosei University, Faculty of Lifelong

Learning and Career Studies

Since 2013 Part-time lecturer at the University of Yamanashi, Faculty of

Life and Environmental Sciences

iv

Contents

Preface .......................................................................................................... i Part 1 The Process of considering taking out a Life Insurance .................. 1 Chapter 1: Introduction ..................................................................................... 1

1. Changes in consumers’ purchasing process ............................................... 1 2. Changes in Consumer Behavior pertaining to Life Insurance ................... 2

Chapter 2: The Process of the Recognition Stage ............................................. 4 1. The established theory of the life insurance industry ................................. 4 2. Consumers that come to buy insurance ................................................... 4 3. Consumer decision process in the consumer behavior theory ................... 6 4. What’s needed is not to arouse needs but to listen attentively ................... 7 5. What makes people think of getting insurance? ......................................... 7 6. Effects on the process of “Search” and those that follow .......................... 9

Chapter 3: Emotion Stage of the Search Process ............................................ 12 1. Timing of External Search ....................................................................... 12 2. Use of Information Source ....................................................................... 14 3. Understanding the Actual Conditions and Background of External Search

Behavior is Required ................................................................................ 16 4. Internet as a Source of Information .......................................................... 17

4-1. Characteristics by attribution ........................................................... 18 4-2. Characteristics by awareness............................................................ 18 4-3. The reason behind people collecting information on the Internet .... 21

5. The required action against consumers trying to arm themselves with

knowledge ................................................................................................ 22 6. The Contents of Information Consumers Search for When Considering

Taking Out Insurance ............................................................................... 23 6-1. The contents of information that consumers search for ................... 23 6-2. Information source and contents of information .............................. 27 6-3. The Level of satisfaction and loyalty, and the contents of information

searched ............................................................................................ 28 Chapter 4: The Process of Comparison and Examination at the Emotion Stage

....................................................................................................... 30 1. The actualities of consumers’ actions of comparison ............................... 30 2. Where the factors that support the act of comparing lay .......................... 33 3. Consumers’ sense of conviction ............................................................... 34

3-1. Knowledge level at the time of considering taking out a policy ...... 35 3-2. The importance of having consumers deepen their knowledge

through comparison and examination .............................................. 37 4. Target and Scope of Comparison and Examination ................................. 39

4-1. The number of competing companies—changes in the consideration

set ..................................................................................................... 39

v

4-2. Scope of competing products and services ...................................... 40 Chapter 5: Purchase Process in the Action Stage ............................................ 44

1. The Importance of Price (Insurance Premium) in Selecting Insurance

Products.................................................................................................... 44 1-1. The Significance of “Price (Insurance Premium)” for the Consumer

......................................................................................................... 44 1-2. The Significance of the Insurance Premium as the Final Determining

Factor ............................................................................................... 46 2. Consumers’ Level of Understanding of the Products and the Satisfaction

with Price Adequacy and Necessity of Assurance ................................... 48 2-1. Consumers’ level of understanding of products at the time of taking

out insurance .................................................................................... 49 2-2. Level of satisfaction with price adequacy and understanding of

necessity at the time of taking out insurance.................................... 51 3. Decision Making in the Action Stage....................................................... 54

3-1. Reason for choosing the company from which to take out insurance

......................................................................................................... 54 3-2. Reason for choosing the channel from which people took out their

insurance .......................................................................................... 55 3-3. The final determining factor in making the decision ....................... 56

4. The Image of the Desired Human Channel .............................................. 57 4-1. Image of human channels................................................................. 58 4-2. The desired human channel .............................................................. 60

Chapter 6: The Sharing Process in the Action Stage ....................................... 62 1. Customer Satisfaction and Loyalty .......................................................... 62

1-1. Loyalty differs depending on the level of satisfaction ..................... 62 1-2. Factors leading to differences in satisfaction levels ......................... 63

2. What Causes Dissatisfaction? .................................................................. 66 2-1. Insurance premium and type of product taken out by the dissatisfied

group ................................................................................................ 67 2-2. The dissatisfied group’s process of considering taking out insurance

......................................................................................................... 68 2-3. The loyalty of the dissatisfied group ................................................ 70

3. Situation of Sharing (Share) Pertaining to Life Insurance ....................... 71 3-1. How WOM related to life insurance is generated ............................ 71 3-2. Characteristics of consumers who rely on WOM ............................ 73 3-3. The status of WOM dissemination and the characteristics of those

who spread the word ........................................................................ 75 4. How important is following up? .............................................................. 77

4-1. Situation with follow-up activities ................................................... 78 4-2. Fruits of following up ...................................................................... 80

Part 2 Consumer Segment and Process of Considering Taking Out

vi

Insurance ....................................................................................... 84 Chapter 1: Status of Having Life Insurance and Consumer Heterogeneity .... 84

1. Changes in the consumers’ process of considering taking out insurance . 84 2. The consumer segment and action of considering taking out insurance .. 85 3. The situation of life insurance ownership ................................................ 87

3-1. The situation of people with coverage considering taking out

insurance .......................................................................................... 88 3-2. The situation with non-policyholders ............................................... 93

Chapter 2: Segmentation Based on Demographic Attribution ........................ 99 1. Life insurance coverage held by the younger generation ......................... 99

1-1. The actual status of coverage among the younger generation ........ 100 1-2. The savings/investment behaviors and awareness of the younger

generation ....................................................................................... 104 2. Need for protection by the core target insurance group ......................... 110

2-1. Family structure ............................................................................. 110 2-2. Life insurance coverage ................................................................. 111 2-3. Background factors for protection needs ....................................... 112 2-4. Intention to get coverage going forward ........................................ 113

3. Household Circumstances and Intention to Get Insurance .................... 116 3-1. Household circumstances ............................................................... 117 3-2. Segmentation by household circumstances and insurance coverage

....................................................................................................... 118 3-3. Segment of household circumstances and level of satisfaction...... 121

Chapter 3: Consumer Insurance Literacy and Actions to Examine the

Possibility of Getting Insurance .................................................. 124 1. Formative Factors of Insurance Literacy ............................................... 124

1-1. Basic knowledge of insurance ........................................................ 124 1-2. Formative factors of insurance literacy .......................................... 127

2. Insurance literacy and actions taken when examining the possibility of

taking out insurance ............................................................................... 132 3. Insurance literacy and the channel of choice/level of satisfaction ......... 135 4. The Brand of the Life Insurance Company and Actions to Take Out

Insurance ................................................................................................ 139 4-1. Brand in marketing ......................................................................... 139 4-2. The brand image of life insurance companies ................................ 140

Chapter 4: Differences in the Actions of Examination by Products and

Channels ...................................................................................... 144 1. Verifying the argument that medical insurance is unnecessary .............. 145

1-1. Knowledge on insurance and insurance needs ............................... 146 1-2. Outstanding financial assets and insurance needs .......................... 147 1-3. Insurance literacy, outstanding financial assets and needs for security

....................................................................................................... 149

vii

2. Actions of Examination Taken by Medical Insurance Policyholders..... 151 2-1. Situation of medical insurance products ........................................ 151 2-2. Reason for getting insurance differing by generation .................... 153 2-3. The examination process and determining factor when taking out

insurance ........................................................................................ 154 3. Actions of Examinations taken by People with Annuities ..................... 158

3-1. Situation of annuity products ......................................................... 158 3-2. Reason for examining the possibility of getting insurance ............ 159 3-3. The examination process and determining factor when taking out

annuities ......................................................................................... 160 3-4. Examination process that differs depending on insurance literacy 162

4. Consumers who Use the Shop Channel (independent insurance shops) 164 4-1. Recognition of independent insurance shops ................................. 165 4-2. Use of independent insurance shops .............................................. 166 4-3. Reason for choosing independent insurance shops ........................ 169 4-4. Outlook going forward ................................................................... 173

1

Part 1 The Process of considering taking out a Life Insurance

Chapter 1: Introduction

1. Changes in consumers’ purchasing process

In recent years, consumer behavior has changed significantly as a result of

changes in the social economic environment and information environment as

typified mainly by the prevalence of the Internet. Indeed, studies conducted in

Japan on purchasing behavior of general goods and services show that the role

of information in the process of making purchases are changing, and

frameworks,2 such as AISAS

® and AISCEAS, which incorporate the concept

that consumers proactively search for information and share information after

making purchases, are being proposed,3 leading to the accumulation of

experimental studies along these lines. Among such consumer purchasing

processes, there are the traditional frameworks typified by AIDMA, and then

there is AISAS®

which explains that consumers do not come to have the desire

(Desire) to purchase products and services they become interested in (Interest)

from paying attention (Attention) to information on products and services, but

rather they conduct a search (Search) when they become interested in

something and make the purchase on the spot [Figure 1-1] Furthermore, there

is the AISCEAS that explains that there is the process of comparing

information on the product or service (Comparison) obtained by conducting a

search (Search) in order to consider whether it is worth purchasing

(Examination) prior to making the purchase (Action). The latter concept

attempts to understand the purchasing process in more detail than AISAS®

.

2 In addition, there are other frameworks, namely AIDEES and SIPS. However, these

frameworks do not clearly define the process of information searching (Search), and therefore, they are omitted in this text.

3 AISAS was proposed by Dentsu, while AISCEAS was proposed by Amviy Communications.

2

These are frameworks designed to understand consumers and have been

proposed mainly for the purpose of contributing to advertisement strategies,

namely identifying the necessary medium and messages for companies to

convey information at an appropriate timing to consumers. Indeed, there are

some that maintain the process should be divided into three stages,4

categorizing attention (Attention) as the (1) recognition stage; interest

(Interest), search for information (Search), comparison (Comparison) and

examination (Examination) as the (2) emotion stage; and purchase (Action)

and information sharing (Share) as the (3) action stage; and the medium for

reaching out to the consumers, the contents of the message, and KPI should be

changed depending on the respective stages.

2. Changes in Consumer Behavior pertaining to Life Insurance

As seen above in the purchase behavior of general goods and services,

consumers are now going through the process of searching, comparing, and

examining different information to make purchases, and then they share

information on the purchased goods or services or its providers with people

close to them or over the Internet.

In the social economic and information environment of the recent years,

what kind of process are consumers going through to purchase life insurance?

When taking out life insurance, the preferable amount of coverage differs

depending on the family structure and the income and asset status, and in some

cases, the requirements for benefit payment differ between companies;

therefore, it is highly difficult for a general consumer to fully understand the

products, to make comparisons, and to select which product they should

purchase on their own. Furthermore, upon actually making the purchase, not all

policyholders will receive insurance money or benefits, and even if they do

receive insurance money or benefits, it may take a long time, perhaps decades,

before the money is actually received, or the beneficiary may be different from

the policyholder, such as in the case of insurance against death; therefore, it

seems difficult to share the assessment on whether or not the life insurance

purchased was good or bad.

However, in a focused group interview on life insurance we conducted in the

past, people exhibited behaviors of trying to search and make decisions on their

own or to acquire knowledge as can be seen in comments, such as “I won free

consulting by a financial planner when renewing my policy and was

recommended an assurance offered by a foreign capital insurance company, so

I compared several companies on an insurance comparison website” or “I

searched for life insurance on Yahoo!, added the websites of the companies

4 Some point out that Interest should be included in the (1) recognition stage.

3

from the search result to my favorites, and reviewed them over a couple of

days. I thought I’d check what kind of insurance others were getting to obtain

advance knowledge first on what product of which company was good.” So it

seems that consumers also go through the process of searching for information

and making assessments by comparing companies using comparison sites or

comparing the websites of the individual companies to determine which policy

to buy or which company to go with in the process of a taking out insurance. It

can be considered that the changes in the purchasing behavior for general

goods and services described above are also taking place in the field of life

insurance. According to the laws of AISCEAS; the process of taking out a life

insurance can be outlined as the need is aroused (A, I) by the approach from

the seller, such as sales agents or life events; then information is collected (S)

from the Internet, brochures, or specific proposals, compared and examined (C,

E); and then the contract is concluded (A); and at the same time, the

assessment on the insurance company, its personnel, and the product details is

disseminated (S) by word of mouth to family members, friends, and

acquaintances.

In Part 1, among the various frameworks pertaining to the consumer

purchasing process suggested, we will look at the specific behaviors and

thoughts of consumers in the different stages of taking out an insurance policy

according to the laws of AISCEAS that captures the purchasing process in the

most segmented way.

4

Chapter 2: The Process of the Recognition Stage

1. The established theory of the life insurance industry

"People don't want to think about death, which is a bad omen," "Insurance

(especially life insurance) is a product that is necessary but faces weak demand,

therefore, will not sell if demand is not aroused." It is probably safe to say

these are established industry theories that everyone in the life insurance

industry would know very well. It has been said so for years and I have heard it

myself a number of times. However, recently, we are starting to see people

think of and prepare in advance for their death or after death by arranging for

their graves or writing their wills or having their funeral performed while they

are still alive, for example. Furthermore, as mentioned in the previous chapter,

word of mouth (WOM) has become one of the triggers for consumers to

consider taking out an insurance policy. Thus, the tendency to consider it a

taboo to talk about illness or death, which is deeply related to life insurance

products, seems to be waning greatly. Rather, products and services answering

to the needs of those who want to prepare for their after death seem to have

become less uncommon with Will Kits that assist people to prepare their own

handwritten will and Ending Notes for writing down what people want for their

terminal care or nursing care, their wishes regarding their funeral and grave, as

well as information on their insurance and properties, being sold.

So, is the industry's established theory, "insurance is a product that is

necessary but faces weak demand, therefore, will not sell if demand is not

aroused," still valid today?

2. Consumers that come to buy insurance

In recent years, the sales channel for life insurance has diversified to include

retail stores, bancassurance, and the Internet (direct sales). As for

bancassurance, there are cases where insurance products are sold not only by

tellers but also by liaison officers making rounds, however, retail stores and the

Internet (direct sales) channels both require consumers to go to the store in

person or visit the website themselves, and this is decisively different from the

traditional push-based personal channel such as sales agents and agencies that

life insurance companies had developed. A sense of crisis on the part of life

insurance companies, that the ratio of contact through the traditional channel is falling due to fewer people being home and enhanced security measures in the

workplace, seems to exist behind the diversification of sales channels. Then

again, if the reality were as the above mentioned theory, would it not be that

the consumers would stay away from these retail stores or the websites of life

insurance companies on the Internet, apart from having to have to visit for

5

necessary procedures after taking out the insurance?

More and more stores for people to visit are being opened in recent years

including those offering products of multiple insurance companies by agents

shared by multiple insurance companies, as well as those set up by insurance

companies solely for their own products. Consumer awareness of these retail

stores accounted for 62%, or above 60% overall in a survey conducted by our

company in January 2013. However, policyholders who had gone through such

stores when taking out their most recent insurance policy remained at 5% of all

life insurance policyholders. The ratio was a mere 12% even for those who

took out a policy in or after 2011. [Figure 2-1] Meanwhile, of those who are

aware of such retail stores, 25%, or a quarter, wished to use these outlets,

making it entirely possible that these stores would grow to become one of the

major channels for consumers to take out a life insurance.

As for the websites of life insurance companies on the Internet, in particular,

the two pure Internet play life insurers founded in 2008 which had issued more

than 10,000 insurance contracts respectively by the second quarter of 2009, had

shown a clear contrast in terms of growth over five years, with 203,000

contracts and 5,300 contracts respectively as of the account settlement date for

the year ended March 2014. Nevertheless, it is conceivable that the number of

consumers who considered purchasing an insurance policy over the Internet by

themselves amounted to several times more than these figures, if those who

dropped out in the course of considering, before concluding a contract are

included. The speed of growth seems to be slowing somewhat in recent years. Still, some of the existing life insurance companies are starting to sell their

products online and the Internet is deemed to gradually become established as

a sales channel in light of its convenience and moderate insurance premium.

As seen above, the conventional theory is losing its validity in the present

time, as insurance is not necessarily a product that is necessary but faces weak

62.4

5.4

12.3

24.7

0

10

20

30

40

50

60

70

Recognize(N=5309)

Have used(n=4021)

Got insurance in2011 or later

(n=798)

Desire to use(n=3315)

%

Figure 2-1 Consumers’ recognition, utilization experience,and use intention of Insurance Shops.

6

demand anymore, and as there are definitely quite a few consumers who go to

buy insurance without having to have the needs for insurance being aroused.

3. Consumer decision process in the consumer behavior theory

As described above, a certain class of consumers is already heading to stores

and online sites seeking life insurance products on their own without waiting

for sales agents or agencies to visit and solicit them and this tendency is

expected to become even stronger. Are consumers going to be taking out

insurance policies directly from life insurers' online sites or retail stores and not

through sales agents or agency channels?

The general studies of marketing theories since the 1980s have developed

regarding consumer behavior as a procedure of information processing

(consumer information processing model). The accumulation of such studies

have brought much knowledge leading to a better understanding of consumers,

however, looking at the actual behaviors of consumers, the same consumer

would follow different procedures when making purchases depending on the

person's interest or level of knowledge of the product concerned or the

situation, e.g., the person might actively collect information by comparing

catalogs and pamphlets or by visiting stores to actually hold the product when

considering to buy, while with another product, the consumer may impulsively

purchase a new product that the person happened to see in a shop. If they

become interested in the product or service, consumers will behave proactively

towards making a purchase, collecting information and examining on their own,

for example.

As we saw in the previous chapter, consumers tend to collect information on

"insurance" on their own when considering a policy or to review the policy

they have if their interest is aroused by the WOM of a friend or an

acquaintance, or because of a particular event in life or that of a family member.

And the online sites of life insurance companies are being used by many

consumers when they consider taking out a policy because it is highly

convenient. In a focused group interview we have conducted in the past, it has

been confirmed that consumers do search the Internet but end up relying on

sales agents because they felt that "you can't understand with the Internet

unless you think for yourself," or "the Internet isn't for me." Because the

enormous amount of information on the Internet requires the consumers to

have basic knowledge and information processing abilities, it is probably true that only people of specific classes such as those with a certain level of

knowledge or with high information processing ability can actually decide on

taking out a policy with information taken solely from the Internet. Meanwhile,

the retail stores, which people can drop in during their daily shopping routines,

are highly likely to catch on as an easy way to collect information due to its

7

convenience, and may well win over consumers who cannot make their

decision based solely on information on the Internet, to the extent these stores

have the presence of humans that can mediate. In determining which channel

the respective consumers would actually use, whether or not they can obtain

information that is easy to understand based on their own level of knowledge,

and whether or not the channel helps remove their concerns, seems to be a big

factor. What is common for all channels, no matter which, is that they help lead

the consumers to a specific product according to their own needs or their

concerns behind the needs.

4. What’s needed is not to arouse needs but to listen attentively

As mentioned in the beginning, the sense of feeling that people don't want to

think about death, which is a bad omen, seems to be waning greatly in recent

years. Consumers take up insurance as a topic of their WOM and do recognize

the necessity of life insurance in everyday life, making comments, such as "I

sort of did feel the necessity" or "I did think it was something to get when you

started working."

Which channel a consumer who starts considering taking out an insurance

policy would go through depends on the amount of knowledge and the ability

to process information of the respective consumers as well as whether he or she

would want someone to mediate, or in other words, whether he or she would

prefer to go through a personal channel or prefer a channel that does not

require meeting a person. In any case, perhaps what is required of the vendors

is not to arouse the needs of the consumers but to listen to the concerns behind

the needs to take out a life insurance policy and to provide measures (solutions)

that would be appropriate to alleviate these concerns.

In the next chapter, we will review consumer behavior with a focus on the

recognition stages of attention and interest in the purchase process described in

the laws of AISCEAS explained in the introduction, and clarify the factors that

affect the process of searching for information (search) and those that follow.

5. What makes people think of getting insurance?

Looking at the results of the quantitative survey conducted by our company

in January 2013 on what aroused the needs of getting life insurance coverage

and why people started thinking of taking out a policy, the most common responses were “solicited by sales agent” and “by chance,” accounting for 13%

respectively, followed by “started working/changed jobs” (11%), and then

“reviewing family finances/life plan” and “got married” (10% respectively).

[Figure 2-2] Categorizing the reasons by types, “life events” scored the highest

accounting for 39%, and then “reviewing family finances/life plan” (17%),

8

“solicited” (16%), “WOM” (14%) and “commercials, direct mail, etc.” (12%)

securing over 10% each, showing that the individual’s life event or life

planning was more likely to be the motivation than approaches made by life

insurance companies or sales agents.

By gender, male respondents were more motivated by “life events,” while

female respondents were more motivated by “WOM” and “rise in income”

than the opposite sex. [Figure 2-3] Furthermore, by age groups, “life events”

scored high among people in their 20s and 30s with more than half of the

respondents falling in this category, while the higher the age group, “solicited,”

“commercials, direct mail, etc.,” and “rise in income” became more common.

39.0

10.8

9.8

9.1

17.4

10.1

5.6

16.2

13.3

14.3

9.1

12.7

11.7

5.0

9.2

6.7

0 10 20 30 40 50

<<Life event>>

Started working/

changed jobs

Got married

Had children

<<Reviewing life plan/

family finances>>Reviewing life plan/

family financesConcerns over

public pension

<<Solicitation>>

Solicited by direct

underwriting agent

<<WOM>>

Recommended

by someone close

<<By chance>>

<<CM, DM>>

DM, advertisement, leaflet

inserted in newspaper

<<Income rise>>

Insurance expired

N=4021

%

*Items less than 5% are omitted

Figure 2-2 Reason for getting insurance

44

1617

12 12 12

7

34

18 15 1714

11 11

63

13

8

12 12

6 5

52

15

12

15 14

85

40

1814 15 13

108

30

19 19

1412 13 12

28

1921

1412

1813

39.0

17.416.2 14.3 12.7 11.7

9.2

0

10

20

30

40

50

60

70

Life event Reviewing lifeplan/family finances

Solicitation WOM By chance CM, DM Income rise

Male (n=2000) Female (n=2021)

in their 20s (n=298) in their 30s (n=873)

in their 40s (n=917) in their 50s (n=956)

in their 60s and above (n=977) Total (N=4021)

%

Figure 2-3 Reason for getting insurance (by gender)

9

6. Effects on the process of “Search” and those that follow

The results of the quantitative survey, which explained the four processes of

“considering the needs of having assurance,” “searching for

companies/products,” “considering the types and costs of the assurance,” and

“comparing the companies/products” and asked people of their actions

according to the reasons why they began considering getting coverage, show

that those motivated by life events scored higher in the three processes of

“considering the needs of having assurance,” “searching for

companies/products,” and “comparing the companies/products.” [Figure 2-4]

Meanwhile, those motivated because they were solicited scored similarly with

the overall result for “considering the details and costs of the products,”

however, fell below the overall figures when it came to the other three

processes, and this shows that these people rarely took such actions. Those

motivated through “reviewing life finances/life plan” and “commercials, direct

mail, etc.” scored higher in all of the processes, and were apparently proactive

in all stages of consideration.

As can be seen also from the focused group interview, although those

motivated because they were solicited or by WOM do consider the details of

40.3

22.7

29.3

19.8

42.3

25.2

27.5

20.9

55.9

34.5

41.8

35.9

42.8

25.8

34.7

21.7

35.0

12.1

26.9

13.4

51.2

36.3

50.5

32.3

43.7

24.5

32.3

24.3

0 10 20 30 40 50 60

Considered the necessityof assurance

Searched for

company/product

Examined cost anddetail of product

Compared and examinedcompany/product

Total (N:4021) Life event (n:1569)Reviewing life plan/family finances (n:701) WOM (n:577)Solicitation (n:651) CM, DM (n:471)Income rise (n:371)

%

Figure 2-4 Examination process when getting insurance most recently

10

the product as well as the cost of insurance premium to a certain degree, they

do not actively consider the necessity of getting assurance nor search for or

make comparisons with other companies and alternative products.

・ “A sales agent happened to come to my workplace so I listened to what

the person had to say. A colleague had been encouraging me to get

coverage so I asked for a savings-type product with which I can get more

money back as a bonus, and I took out the insurance” (male, age 25)

・ “The person brought me a life design plan proposing the kind of

coverage I should have even though I hadn’t asked for it but I

remembered my friends also got insurance when they started working

and thought maybe that’s what one is supposed to do, so I took out the

policy without looking carefully at the plan” (male, age 29)

Moreover, for those motivated by life events, life planning or commercials,

direct mail, etc., they are actively selecting their insurance company and

product by requesting materials or consulting financial planners, as seen as

follows.

・ “I read in a women’s magazine that more female are falling ill due to

diseases peculiar to women. No one came to solicit at the workplace

where I work as a temporarily dispatch so I requested materials mainly

over the Internet from about four companies, compared them and

decided on which insurance to get” (female, age 28)

・ “When I had a child, I consulted a FP for 10,000 yen and got an

insurance after making some comparisons and giving it consideration”

(male, age 38)

Meanwhile, in cases where solicitation or WOM was the motive, there are

individuals that want to collect information themselves and make the decision,

as seen below.

・ “A friend had told me ‘you’ll get insurance money if you have to pay for

hospitalization and you’re going to be suffering mentally quite severely

from the pain of the surgery, so it’s better to get a private room’ so I

searched some websites of different companies and requested for

materials” (female, age 33)

・ “A sales agent brought a proposal right before the maturity of my

contract by I thought I’d change to a less expensive plan so I searched on

the Internet, requested some materials and got an insurance” (female, age

33)

Looking at the information sources used to consider taking out a policy according to the results of the quantitative survey, “sales agent” scored the

highest for all respondents excluding those motivated by commercials and

direct mails, etc., followed by “FP” for those motivated from reviewing their

life plans or family finances, “talking to family, relatives, friends or

11

acquaintances” for those motivate by WOM, and “materials requested to

insurance companies by oneself” for others. “Materials requested to insurance

companies” was the third highest for those motivated by reviewing their life

plans and family finances as well as those motivated by WOM so apparently,

the source of information does not differ all that much between the different

motives of consideration. [Figure 2-5]

On the other hand, it can be assumed from the comments in the

abovementioned quantitative survey, that depending on how actively one is

involved in the process of considering taking out a policy, their level of

satisfaction later on and intention to continue holding the policy seems to differ.

It is perhaps necessary to look back once again whether or not the customer

could feel that he or she has actively made considerations in the process

starting from the approach to the signing of the contract.

(%)

Ｎ

Direct

writing

agent

Materia

ls

request

ed to

l i fe

insurer

s

Li fe

insuran

ce

compari

son s i te

Fami l ie

s and

friends

Flyers

and/or

Ad

inserted

in

newspap

ers

Li fe

insurer

s '

webs ite

ＴＶＣＭＤＭＦＰ Materia l

s

dis tribut

ed or

ci rculate

d at

office

Total 2537 27.4 17.4 15.0 12.5 10.2 10.0 9.6 9.1 8.6 7.6

Li fe event 999 30.5 16.1 15.0 14.7 7.7 9.9 11.4 7.5 8.5 9.2

WOM 380 31.3 24.2 14.2 25.3 11.1 11.8 11.1 10.8 8.2 5.0

Sol ici tation 343 64.1 14.3 7.3 12.2 5.2 6.1 8.2 11.1 4.4 6.4

ＣＭ, ＤＭ 389 14.7 24.2 17.7 9.3 28.8 14.4 18.0 22.4 4.4 17.2

Income rise 263 30.4 24.0 16.0 8.7 7.2 12.5 7.6 10.3 6.8 5.7

Reviewing l i fe plan/fami ly finances 579 25.0 22.1 19.3 9.7 10.4 12.1 8.8 9.8 22.3 6.6

Figure 2-5　Information sources when considering the most recent insurance purchase

12

Chapter 3: Emotion Stage of the Search Process

In this chapter, we will focus on the stage of search as the next step for

consumers in the process of taking out life insurance. In consumer behavior

theory, information search is divided into internal search, which seeks the

consumer’s own past experience and knowledge, and external search, which

utilizes different information sources to seek information that is lacking with

internal search, and the search stage in the AISCEAS model is regarded as

external search. At (1) which time and (2) where are consumers who are

considering taking out life insurance searching for information?

1. Timing of External Search

First of all, in order to see when consumers perform external searches, let us

go back to see once again the behavior of policyholders when they considered

taking out insurance most recently.

Looking at the results of the quantitative survey by our company showing

the four processes of (a) considering the need for insurance, (b) searching for

companies and products, (c) reviewing the contents and costs of products, and

(d) comparing companies and products relative to the actions of life insurance

policyholders when they purchased their most recent policy, overall,

“considering the need” scored the highest with 40% followed by “reviewing

the contents and costs of the products” (29%), “searching for companies and

products” (23%), and “comparing companies and products” at approximately

20%. [Figure 3-1] When looking at these results when they took out their most

recent policy, the ratio tended to rise in general for all actions, and comparing

the execution rate of policyholders who took out their insurance in or after

2011 with those that did so in or before 1997, it can be seen that “searching for

companies and products” and “comparing the companies and products” in

particular increased by 2.5 to 3 times. Looking at the combination of the four

actions, overall, “only considered the necessity” scored the highest with 22%

followed by “reviewed the contents and costs of the products” (10%) and “all

four” (9%) in that order. [Figure 3-2] The ratio of those who went through all

four actions was limited to about 10% of the total respondents, however,

looking at the results by the timing they took out their most recent policy, the

ratio was 11%, for those who made their most recent purchase between 2008

and 2010 while it was 15% for those that did so in or after 2011 indicating that the tendency has been on the rise in recent years. The situation is not so

different between the types of products, and while the execution rate of

“searching for companies and product” and “comparing companies and

products” were slightly higher for medical/nursing insurance policyholders

among all policyholders, the difference by types of products disappears when

13

the figures are confined to those who took out their most recent insurance in or

after 2011. We can assume that “searching for companies and products” and

“comparing companies and products” are becoming typical actions among

consumers considering getting life insurance.

40.3

32.8

39.742.9

44.6

52.1

29.3

21.9

30.5

36.332.5

37.7

22.7

13.6

19.4

26.0 28.333.8

19.8

10.4

15.2

21.9

27.131.1

0

10

20

30

40

50

60

Overall(N = 4021)

in or before1997

(n = 1145)

1998-2002(n = 315)

2003-2007(n = 604)

2008-2010(n = 808)

in or after 2011(n = 798)

Considered the necessity of havingassurance

Reviewed the contents and/or costs ofproducts

Searched for companies and/orproducts

Compared companies and/or products

%

Figure 3-1 Actions taken when considering taking out insurance most recently

21.8

20.1

22.4

20.8

21.1

23.2

23.6

17.0

18.2

21.8

10.3

8.3

9.2

12.7

13.6

10.6

8.7

11.1

10.3

11.4

8.9

14.9

10.9

9.4

6.1

4.2

7.0

6.5

5.5

11.7

5.1

6.5

4.9

5.3

4.7

4.5

5.4

3.1

4.0

5.3

4.9

4.8

5.1

4.2

5.0

4.7

4.4

6.5

3.6

5.2

4.2

5.1

5.6

4.2

2.2

3.1

3.2

5.1

5.1

4.8

16.6

21.3

19.0

20.0

17.6

10.9

14.6

15.9

15.8

18.8

28.3

19.0

22.9

23.3

29.7

38.9

33.0

34.7

37.5

21.1

0% 20% 40% 60% 80% 100%

Overall(n = 3536)

in or after 2011(n = 767)

2008-2010

(n = 751)

2003-2007(n = 544)

1998-2002(n = 279)

in or before 1997(n = 963)

Death protection(n = 1362)

Savings(n = 352)

Individual annuity(n = 253)

Medical/nursing

(n = 1553)

a c abcd ac b d Other None of the above

Tim

ing

of g

ettin

g m

os

tre

ce

nt c

ove

rag

eT

ype

of m

os

t rece

nt

pro

du

ct ta

ke

n o

ut

Figure 3-2 Actions taken when considering taking out insurance most recently (combination)

14

2. Use of Information Source

During such actions of considering taking out life insurance, from what kind

of sources are consumers getting information? Looking at the information

sources used for external search by life insurance policyholders when they

were most recently considering taking out their policies, overall, “direct

writing agent” scored the highest, followed by “information requested by

oneself” and “life insurance comparison site.” [Figure 3-3] Looking at the

figures by the timing the policy was taken out, “comparison site” and

“insurance companies’ website” were used by around 10% of the overall

respondents and the utilization rate is on the rise. According to the comments

heard at the focused group interview, consumers are using comparison sites

and official sites of the life insurance companies to search for information from

the early stages of consideration in order to obtain advance knowledge or upon

coming up with the idea of getting coverage.

・ “I thought I’d check what kind of insurance others were getting and

obtain advance knowledge first on what product of which company is

good so I searched for “life insurance” on Yahoo! and reviewed the

websites of companies that showed up.” (Male, age 37)

・ “I had no knowledge at all and knew no agent so I looked up the

websites on the Internet as a first step to get a vague sense of how it is to

get insurance.” (Male, age 36)

・ “I first went to the insurance comparison site on the Internet. I also

looked at some of the companies’ websites but they didn’t really provide

details.” (Male, age 51) Looking at the information source used for the respective actions taken when

considering taking out an insurance, while “direct writing agent,” “information

requested by oneself,” and “life insurance comparison site” accounted for the

top three when considering the need for having insurance as well as reviewing

the contents and costs of the products, when searching for companies and

36

14

5

1111

3

9 11

2

12

96

4

8

16

29

18

1111

1110 12

9

6

13

7 7 68

4

9

23

22

12

17

14 13

108

6

6

4

6 5 7

45

26

17

20

13

911

99

10

6 6 7 8

4

9

5

24

20

24

11

8

15

10 8

17

4

79 9

5

10

4

27.4

17.4

15.0 12.5

10.2 10.09.6 9.1

8.67.6 6.9 6.8 6.6 6.1

6.15.0

0

10

20

30

40

Directwriting

agent

Materialrequested

by oneself

Life insurancecomparison

site

Opinions offamily

memberor friend

Flyers and/or Ad inserted

in newspapers

Websites ofinsurance

companies

TVCM DM FP Materialpassed

around/distributed in

the workplace

Books oninsurance

Insuranceagency

Financialinformation

websites

Advert isementin

newspaper/magazine

Text board/WOM site

on lifeinsurance

Newspaper/magazine

article

In or before 1997 (n = 588) 1998-2002 (n = 196)

2003-2007 (n = 417) 2008-2010 (n = 579)

In or after 2011 (n = 621) Overall (n = 2537)

%

Figure 3-3 Information source for considering taking out insurance (only items with overall utilization rate of for 5% or more)

15

products or comparing the companies and products, the order changed to

“information requested by oneself,” “life insurance comparison site,” and then

“direct writing agent.” [Figure 3-4] Comparing the utilization rate, when

considering the need for having insurance or reviewing the contents and costs

of the products, “direct writing agent” scored higher than when consumers

were searching for companies and products or comparing the companies and

products, while “information requested by oneself,” “life insurance comparison

site,” “insurance companies’ website,” “financial information websites,” and

“WOM sites or text boards on life insurance” scored higher than when

consumers were considering the need for insurance or reviewing the contents

and costs of products. Furthermore, when comparing the companies and

products, “FP” was used more, indicating that the source of information used

differed depending on the stage of the action of consideration.

Looking at the number of types of information sources that policyholders

used, it increased from an average of 1.61 types for those who took out their

insurance in or before 1997 to 2.14 types for those who took out their

insurance in or after 2011. [Figure 3-5] If we look at the figures by the actions

taken when considering getting insurance coverage, people used 1.93 types of

information sources at the stage of considering the need for having insurance,

2.19 types at the stage of reviewing the contents and costs of the products, 2.56

types at the stage of searching for companies and products, and 2.65 types at

the stage of comparing companies and products, respectively. By the timing

they took out their insurance, except for comparing companies and products,

the number of types of information sources used tended to rise from 1998. In

particular, when reviewing the contents and costs of products, while the

average types of information sources used was 2.03 between 1998 and 2002,

this increased by approximately 1.2 times to 2.52 types for those who got

coverage in or after 2011.

29

19

1514

109 9 9

108 7

76 6 6 5

29

24

19

13 1314

1012

8 9 87 8 7

86

21

28 27

12 13

1714

13 12

810 10

119

12

8

22

3032

11 12

20

11

14 15

711 10

119

14

8

27.417.4

15.0

12.5 10.210.0

9.69.1

8.67.6 6.9 6.8

6.66.1 6.1 5.0

0

10

20

30

40

Directwriting

agent

Materialrequested

by oneself

Life insurancecomparison

site

Opinions offamily

memberor friend

Flyers and/or Ad inserted

in newspapers

Websites ofinsurance

companies

TVCM DM FP Materialpassed

around/distributed in

Books oninsurance

Insuranceagency

Financialinformation

websites

Advert isementin

newspaper/magazine

Text board/WOM site

on lifeinsurance

Newspaper/magazine

article

Considering necessity of having assurance (n = 1620) Reviewed contents and costs of products (n = 1177)

Searched for companies/products (n = 913) Compared companies/products (n = 795)

Overall (n = 2537)

%

Figure 3-4 Information source for considering taking out insurance (only items with overall utilization rate of for 5% or more)

16

3. Understanding the Actual Conditions and Background of External

Search Behavior is Required

As we have seen above, consumers not only consider the need for insurance

or review the contents and costs of products when they look into getting

insurance but they are starting to also research and compare the companies and

products themselves. Moreover, as for the information sources they use in such

cases, in addition to information disseminated by the seller such as by direct

writing agents or their materials, various sources of information including

comparison sites where consumers can compare many life insurance

companies and products at once, as well as the insurance companies’ websites

and opinions of close family members and friends, are being taken into account

when considering taking out insurance. Furthermore, it has been confirmed that

in recent years, online text boards and websites introducing WOM are being

used as well in the consideration process.

Thus, consumers have come to use various sources of information according

to the different objectives for external search in recent years. These sources of

information are considered for use in various ways depending on the consumer

as well as the objective. It can be said that in order to deliver appropriate

information to consumers seeking information and to ensure it leads to the sale

of your products, a deeper understanding of consumers’ external search behaviors, including when the respective sources of information are used, the

purpose of use, and the psychology behind the behavior of information search,

is required

In the next section, we will focus on information sources on the Internet that

are gradually becoming more common as the source of information for life

1.85

1.61

1.82 1.78

1.94

2.141.93

1.69

1.891.78

2.04

2.232.19

2.03 2.031.96

2.35

2.52

2.56

2.332.46

2.302.61

2.92

2.652.70

2.58

2.26

2.702.88

1.00

1.50

2.00

2.50

3.00

Overall In or before1997

1998-2002 2003-2007 2008-2010 In or after2011

Total actions for considering

Considered necessity of having assurance

Reviewed contents and costs of products

Searched for companies/products

Compared companies/products

Types

Figure 3-5 Number of types of information source

17

insurance and look into the characteristics and background of those who use

the Internet for external searches.

4. Internet as a Source of Information

According to the 2013 Communication Usage Trend Survey issued by the

Ministry of Internal Affairs and Communication, the use of the Internet in

Japan has been increasing annually for all generations and reached 74% overall

in 2013. [Figure 3-6] By age group, more than 80% of those below 60 were

using the Internet, while the ratio was approximately 60% for those in their 60s,

indicating that the Internet is becoming established as a daily source of

information for Japanese people in their 60s and younger. In such an

environment, using the Internet when purchasing general goods or services to

search for information or to make comparisons in order to make a decision has

become nothing unusual. Meanwhile, as mentioned in the preceding section,

when considering taking out life insurance, the utilization rate of even the “life

insurance comparison site” which scored the highest, was approximately 15%

overall, and even if we focus on those who took out their insurance in or after

2011, the figure was 24%, implying that the Internet has yet to become the

source of information that everyone uses [as previously shown in Figure 3-3.]

However, considering that the use of the Internet has become an everyday part

of life for society as a whole and that its utilization rate is gradually rising

according to the figures sorted by the timing of the most recent purchase, it is

expected that more consumers will be using the Internet at the stage of

considering taking out an insurance policy.

So what are the characteristics of consumers who use the Internet as a source

of information when they are considering taking out life insurance? In this

section, we will look into the results of a quantitative survey conducted by our

61.5

87.6 86.4 87.6

80.8

55.1

34.0

19.1

9.66.1

68.7

93.1 94.2 91.790.2

75.0

57.0

32.5

24.0

8.8

73.8

97.1 96.8 94.692.5

86.4

66.6

56.3

35.3

14.2

0.0

20.0

40.0

60.0

80.0

100.0

Overall age 15-19 age 20-29 age 30-39 age 40-49 age 50-59 age 60-64 age 65-69 age 70-79 age 80 andabove

2003 2008 2013%

Source: prepared from MIC "Communication Usage Trend Survey"Note: the figure for age group 15 - 19 is taken from the results of "13-19" for 2003

Figure 3-6 Internet Use Rate

18

company to focus on those who took out some kind of life insurance in or after

2011 and confirm the characteristics of those who used the Internet when

considering taking out insurance.

4-1. Characteristics by attribution

First, the ratio of those who used the Internet as a source of information

when they most recently considered taking out an insurance was 25% overall.

[Figure 3-7] Looking at the figures sorted by the timing of the most recent

purchase, the ratio for those who took out their insurance in or after 2011 was

37%, more than 10 points higher than the overall figure, implying that the use

of the Internet as a source of information for life insurance is definitely

expanding. By attribution, there is no difference between genders, while by age

group, as was the case with the use of the Internet, the younger the age group,

the higher the ratio was. Furthermore, by occupation, there is little difference,

although, it was slightly higher for public servants for 2011 or later, and by

product type, slightly higher for medical/nursing insurance.

4-2. Characteristics by awareness By the level

5 of their knowledge of life insurance, 46% of those who used

5 A simple sum of the result of asking the level of knowledge on 18 items pertaining to life

insurance in a scale of five, categorized into three classifications as people’s self-assessment of knowledge on life insurance. The results were categorized and prepared so that the ratios would generally be the same for all life insurance policyholders, with “low level of knowledge” accounting for 31% , “medium level of knowledge” for 36% and “high level of knowledge” for 33%.

37.2

39.6

35.1

40.5

35.5

38.3

31.6

42.2

35.4

38.2

52.5

27.5

37.7

32.2

30.5

28.6

43.2

0 20 40 60

(621)

(288)

(333)

(84)

(183)

(128)

(117)

(109)

(260)

(110)

(40)

(40)

(162)

(202)

(59)

(49)

(308)

%

25.2

24.7

25.8

35.0

31.2

25.2

23.1

18.5

26.7

26.0

29.3

24.3

21.4

20.8

23.9

22.8

29.2

0 10 20 30 40 50 60

Overall (2537)

Male (1308)

Female (1229)

20s (180)

30s (581)

40s (606)

50s (576)

60s and above (594)

Permanent employee (995)

non-permanent employee (423)

Public servant (164)

self-employed (214)

unemployed (707)

Death coverage (912)

Savings (230)

Personal pension (158)

Medical/nursing (1225)

%

By

gen

de

rB

y age

grou

pB

y occu

pa

tion

By typ

e o

f pro

du

ct

Overall In or after 2011

Figure 3-7 Utilization rate of information sourced from the internet when considering taking out insurance

19

the Internet as a source of information were classified as “high level of knowledge”, which was relatively higher than those who did not use the

Internet (41%) and by the timing of when the people took out their insurance,

the ratio of “high level of knowledge” is always higher for Internet users,

although non-users also showed a rising trend for having “high level of knowledge.” [Figure 3-8] It can be said that those who use information sourced

from the Internet when considering taking out a policy have relatively higher

level of knowledge than non-users. There are also major differences to their

thinking towards taking out life insurance, with more than a 10-point

difference between those who use information sourced from the Internet for items such as “I would take out the policy after comparing the features” (users:

84%, non-users: 65%), “If the contents are similar, I would search thoroughly

for the least expensive insurance” (users: 59%, non-users: 41%), “I would

choose different companies to take out policies with depending on the purpose” (users: 63%, non-users: 52%). [Figure 3-9] Meanwhile, the ratio was basically

the same with non-users for items such as “I have a knowledgeable

acquaintance that I can refer to if it’s absolutely necessary,” “I would take out

my insurance with a well-known company,” “I would take out insurance that is

selling well or is popular” while non-users had higher ratios, despite slightly, for items including “I would ask someone who knows insurance companies

and products well before taking out a policy,” and “It’s a hassle to deal with

more than one company.” Users of information sourced from the Internet seem

to be more conscious about selecting products upon comparing the features and reviews of products with emphasis on cost performance, without being

influenced by popularity or sales ranking or relying on others.

45.9

54.2

45.041.0 40.8

51.5

30.9

29.8 30.931.0

34.639.0

16.4

11.9

27.5

17.120.1

10.4

33.6 34.934.5

29.6 28.326.3

0

10

20

30

40

50

60

Overall 1997 orearlier

1998-2002 2003-2007 2008-2010 in or after2011

user (high level of knowledge) non-user (high level of knowledge)

user (low level of knowledge) non-user (low level of knowledge)

%

By the timing of insurance purchase

Figure 3-8 Level of knowledge on life insurance and use of information sourced from the internet

20

Indeed, comments heard at a previously conducted focused group interview

show there are some who use the Internet from the early stage of consideration

to make comparisons or to gain (advance) knowledge.

・ I had no knowledge at all so I searched on the Internet for companies I

knew from commercials as a start and went through their homepage.

(Male, 36)

・ I thought I’d obtain advance knowledge first on what product of which

company was good so I searched “life insurance” and reviewed the

results thoroughly over a couple of days. (Male, 37)

・ I decided to take out an insurance so that I could leave something behind

for my children if something should happen to me and searched

“insurance” on the Internet and looked up a few that I picked out from the search results. (Female, 47)

・ I first compared three or four companies on an insurance comparison site

on the Internet and obtained some general knowledge. (Male, 51)

It can be said that the users of the Internet are carefully proceeding with their

69.6

54.8

47.5

46.0

45.8

41.9

30.1

28.7

24.0

22.4

22.2

20.5

19.9

16.6

15.4

83.6

62.5

46.1

53.3

59.2

48.1

28.0

35.8

30.0

24.4

26.3

20.3

19.8

18.3

16.1

64.8

52.2

48.0

43.5

41.3

39.7

30.8

26.3

21.9

21.8

20.9

20.6

19.9

16.0

15.2

0 30 60 90

I would take out the policyafter comparing the features

I would choose different companies to takeout policies with depending on the purpose

It's a hassle to deal withmore than one company

I'm concerned about whetherthe product is what I expect it to be

If the contents are similar, I would searchthoroughly for the least expensive insurance

I would get minimal insuranceeven if I have money to spare

I would ask someone who knows insurancecompanies and products well before taking out a policy

I'm interested in the reputationof the company and product

I'm interested in new products

I can understand financial andinsurance terms that I see and hear

I constantly collectinformation on insurance

I would take out my insurancewith a well-known company

I have a knowledgeable acquaintance that I can refer to if it’s absolutely necessary

I would take out the insurance evenif it were expensive if the product were good

I would take out insurancethat is selling well or is popular

Overall (N=2537)

User (n=640)

Non-user (n=1897)

%

Figure 3-9 Thinking towards taking out l ife insurance

21

consideration utilizing various sources of information including the Internet

when taking out a policy.

However, even if the person uses the Internet as a source of information at

the stage of considering taking out a policy, they do not necessarily conclude

the procedure online, as only 26% of those using information sourced from the

Internet took out their policies over the Internet, although it did account for the

largest channel, with “direct writing agent” following at 24%. [Figure 3-10]

The fact that the total of channels that do not require face-to-face interaction,

including through “postal mail” and “call center,” only accounted for 40% or

so, implies that those who use the Internet when considering getting insurance

uses the Internet as one of the sources of information and carefully proceeds

with their consideration, but when it comes to going through the actual

procedures to take out the policy, many rely on face-to-face channels typified

by “direct writing agents.”

4-3. The reason behind people collecting information on the Internet

The focused group interview mentioned above also revealed that many of

the people who used the Internet to consider taking out a policy said that

although they did compare a variety of factors based on their search results,

they could not gain a full understanding by doing so and called the call center

or asked direct writing agents for explanations. Then why do they not rely on

direct writing agents from the beginning? Asked of the image of direct writing

agents, those who used information sourced from the Internet tended to score

higher on items giving negative impressions, such as “They’re intrusive,”

“They sell only products that would benefit themselves,” “They lose

enthusiasm once you’ve taken out the policy,” compared to non-users. [Figure

3-11] Meanwhile, there were no differences between those who used the

Internet and those who did not on items, such as “They explain until you’re

satisfied,” “They think in your shoes,” “You can trust them and you can’t go

wrong.” One of the reasons why consumers use the Internet when they

45.0

24.1

48.9

9.2

12.5

8.5

7.2

3.8

7.9

6.7

26.3

3.0

6.3

7.0

6.2

5.4

4.1

5.7

4.2

5.2

4.0

4.1

8.6

3.3

3.1

3.4

3.0

2.7

3.4

2.5

2.2

1.3

2.4

0 10 20 30 40 50 60 70 80 90 100

Overall(N=4021)

User

(n=640)

Non-user(n=3381)

Direct writing agent By postThrough the labor union/general affairs department at work Over the internetContact point of insurance company Counter or salesperson of a bank, etc.Financial Planner (FP) Stores to visitOther agents Call centerOthers

%

Figure 3-10 Channel through which one took out insurance most recently

22

consider taking out life insurance, is these strong negative images of direct

writing agents and perhaps they are trying to arm themselves with logic as a

countermeasure against such false image of direct writing agents.

Although many of such images are presumed to be partially based on

misunderstandings, it can be said that steady, step-by-step efforts to build up a

relationship of trust is necessary in daily marketing activities, such as being

sincere with consumers who try to arm themselves with logic and filling in the

holes in their understanding.

5. The required action against consumers trying to arm themselves with

knowledge

As we have seen, consumers are trying to arm themselves with knowledge

using various sources of information. There may be cases where fragments of

information or information the authenticity of which are uncertain, are being

circulated mainly by information sources that for the seller are difficult to

control the contents and timing of the information, in particular, WOM sites

and bulletin boards. This means that, as a result, it is possible that such

situation is creating consumers who are considering taking out insurance based on incorrect knowledge. In order to have consumers make their considerations

based on correct knowledge, perhaps it is necessary to check from time to time

what kind of information is being transmitted through external sources of

information such as what is being exchanged by WOM or on comparison sites.

49.3

41.8

40.8

35.5

33.1

28.6

16.3

16.2

6.6

55.8

47.3

46.4

38.1

31.3

28.3

16.4

13.9

5.5

48.1

40.7

39.8

35.0

33.5

28.7

16.3

16.6

6.8

0 10 20 30 40 50 60

They're intrusive

They lose enthusiasm once you’ve taken out the policy

They sell only products thatwould benefit themselves

They know in detail

They're convenient because

you don't have to go out

They explain to you in a way that's easy to understand until you’re satisfied

They place themselvesin your shoes

You can trust them

You can trust them and you can’t go wrong

Overall (N=4021)User (n=640)Non-user (n=3381)

%

Figure 3-11 Image of Direct Writing Agents

23

Furthermore, it can also be said that such changes in consumer behavior

mainly in light of the changes in the information and communication

environment show that promotion and consumer communication are becoming

more crucial a challenge in terms of management strategy than ever before.

6. The Contents of Information Consumers Search for When

Considering Taking Out Insurance

As has been set forth in the previous sections, many consumers use various

sources of information to collect information when considering taking out

insurance. So what kind of information are consumers collecting from these

respective sources to use as reference? In the following paragraphs, we will

focus on the contents of the information consumers searched for to confirm the

source of information consumers are using, the contents of information they

searched for, and to examine the relationship between the contents of the

information and the level of satisfaction with the purchased product.

6-1. The contents of information that consumers search for

We asked consumers of the contents of information they searched for when

they were most recently considering taking out insurance, giving them the six

options of (1) general information such as the scheme of the insurance or its

necessity (general information), (2) information on the contents and price of

products (product information), (3) information on products selling well or

those that are recommended (best seller information), (4) information on the

status and health of the companies’ management (management information),

(5) information on the companies’ reputation (company reputation) and (6)

reputation of the sales agents’ attitude (channel information). As a result,

“product information” scored the highest overall accounting for 75%, followed

by “general information” (59%), “best seller information” (17%), and

“management information” (16%). [Figure 3-12] By gender, 78% of females

searched for “product information” scoring higher than males (72%), and by

age group, the younger the age group, the higher the score tended to be for

“general information” and “best seller information.” Furthermore, by product

type, “product information” scored high for annuity insurance and “product

information” scored high for medical and nursing insurance, implying that

there are differences in the information consumers search for depending on

their attribution or the assurance they took out. Meanwhile, by the timing of when consumers took out their most recent insurance, the more recently the

purchase was made, the more people tended to search for “best seller

information,” and those who took out their insurance within two years (in or

after 2010) scored higher on “product information” than the overall figures,

while those who made their purchase within three to five years scored higher

24

on “management information,” indicating that the contents of information

consumers search for differ also by the timing of when they took out their

policies (that said, there seem to be information such as “company reputation”

and “channel information” that are not searched for regardless of the timing of

when the policy was taken out). Separately, by the channel through which

people took out their policies, those who used the Internet, which requires

consumers to actively proceed with their examination scored higher for all four

types of information except for “general information” and “channel

information” than the overall figure. [Figure 3-13] As for other channels,

“general information” scored high for those who used insurance agencies,

while “product information” scored high for those who went through financial

planners or direct sales channels such as by Direct Mail or over the Internet,

and “best seller information” was popular among those who went through

Insurance Shops, financial planners or the Internet.

Meanwhile, looking at the contents of information searched by the

consumers’ level of knowledge on life insurance, for the five types of

information excluding “channel information,” the score tended to rise as the

consumers’ level of knowledge became higher and in particular, for “general

information,” “product information” and “management information,” the ratio

was more than 10 points higher than the group with low level of knowledge.

[Figure 3-14] Although consumers probably would not go so far as to worry

about management information if they did not already have a certain level of

knowledge at the time they were considering taking out insurance, the fact that

they are searching for a broad range of information including general

information and product information when they consider getting coverage is

most likely functioning effectively for consumers to deepen their

understanding of the information they searched for and to deepen their

knowledge on insurance.

25

59.3

60.8

57.5

68.8

63.2

60.6

56.0

55.2

59.1

56.5

66.5

59.1

60.7

61.9

61.0

57.1

74.5

72.0

77.6

78.7

77.5

72.3

75.1

72.1

70.4

78.5

70.6

77.5

78.5

75.9

76.9

70.9

16.6

16.0

17.4

24.9

20.4

17.3

13.9

12.9

17.4

15.3

18.3

16.3

21.5

20.9

13.0

13.3

15.5

16.2

14.7

19.9

17.9

14.5

14.2

14.3

15.6

18.7

18.8

14.5

15.1

18.6

14.1

15.8

11.8

12.6

10.8

19.0

14.1

11.4

10.8

9.0

11.7

12.0

14.7

11.4

12.1

12.5

10.4

11.7

5.4

6.6

3.9

9.0

7.7

5.3

3.3

4.5

7.1

6.2

7.1

3.8

5.9

5.3

3.7

6.0

0 20 40 60 80

Overall(n = 2783)

Male

(n = 1539)

Female(n = 1244)

in their 20s

(n = 221)

in their 30s(n = 582)


in their 50s

(n = 639)

60 and above(n = 734)

Death protection

(n = 1016)

Savings(n = 209)

Personal pension(n = 197)

Medical/nursing

(n = 1340)

Within 2 years(n = 661)

3 to 5 years

(n = 609)

5 to 10 years(n = 454)

10 years or longer(n = 881) General information Product information

Best seller information Management informationCompany reputation Channel information

%

By g

en

de

rB

y ag

e g

rou

pB

y pro

du

ct typ

eT

imin

g o

f takin

g o

ut m

os

t rece

nt

Figure 3-12 Contents of information searched

26

59.3

59.9

55.3

54.7

56.6

53.8

66.3

56.9

66.4

58.8

74.5

68.2

81.1

80.7

82.6

78.2

75.7

83.8

80.4

79.4

16.6

15.1

17.0

12.9

22.5

16.7

20.4

26.2

40.2

17.6

15.5

14.6

16.2

12.0

20.9

19.2

20.4

21.5

16.8

13.7

11.8

11.3

12.4

8.8

16.7

14.1

14.9

13.8

11.2

12.7

5.4

9.6

1.8

0.9

2.7

2.6

3.9

5.4

0.9

3.9

0 30 60 90

Overall(n = 2783)

Direct writing

agent(n = 1096)

Direct saleschannel

(n = 678)

of which by post(n = 342)

of which over the

internet(n = 258)

of which throughcall centers

(n = 78)

Insurance

agencies(n = 181)

FP(n = 130)

Stores to visit

(n = 107)

Banks, etc.(n = 102) General information Product information


%

Figure 3-13 Contents of information searched (by channel used)

59.3

50.9

56.5

67.2

74.5

62.6

77.3

79.0

16.6

12.9

16.3

19.2

15.5

10.0

13.0

21.5

11.8

7.9

10.2

15.7

5.4

5.9

4.3

6.3

0 20 40 60 80

Overall(n = 2783)

Low level ofknowledge

(n = 642)

Medium levelof knowledge

(n = 1075)

High level ofknowledge(n = 1062) General information Product information


%

Figure 3-14 Contents of information searched (by level of knowledge)

27

6-2. Information source and contents of information So, what kind of information sources are consumers using to search for

information? By the types of information sources consumers used when

considering taking out insurance, “general information,” “product information”

and “management information” scored high among those who used insurance

companies’ owned media such as their websites or brochures, while “general

information” as well as “best seller information” and “company reputation”

also scored high for those who used information sources other than insurance

companies such as financial information websites, books on insurance,

newspaper and/or magazine articles, WOM sites. [Figure 3-15]

Moreover, looking at the contents of information by the standpoint of comparison and examination focusing strictly on those who compared their

insurance with other companies’ products, the standpoint of insurance amount

59.3

61.7

69.3

68.0

67.0

74.0

66.7

78.5

77.6

67.3

68.1

60.1

78.4

66.3

66.8

75.4

74.5

72.3

85.0

88.3

79.4

88.6

78.0

85.4

83.1

75.6

78.1

80.3

91.8

79.8

69.6

78.2

16.6

17.4

25.0

30.4

20.8

31.3

23.9

32.2

33.3

16.1

25.2

20.2

43.3

33.2

33.2

30.7

15.5

16.2

24.5

26.8

23.7

30.7

23.5

31.8

32.0

14.7

21.4

21.7

37.1

28.0

31.0

31.3

11.8

11.6

17.1

20.5

17.9

23.4

12.9

19.3

24.2

13.8

16.7

12.3

32.0

17.6

23.4

25.1

5.4

11.4

4.4

4.8

9.8

7.0

3.5

7.3

5.5

5.5

10.0

3.9

9.8

7.8

6.5

7.8

0 20 40 60 80 100

Overall

(n = 2783)

Direct writing agent(n = 783)

Material requested

(n = 567)

Comparison site

(n = 497)

Comments made byfamily members, friends

(n = 379)

Insurance company's

website (n = 342)

DM (n = 255)

Books on insurance(n = 233)

Financial information

site (n = 219)

Material passed around/

distributed at workplace(n = 217)

Insurance agencies(n = 210)

Flyers and/or Ad

inserted in newspapers(n = 203)

WOM site (n = 194)

FP (n = 193)

TVCM

(n = 184)

Newspaper/

magazine article(n = 179)

General information Product informationBest seller information Management informationCompany reputation Channel information

%

Figure 3-15 Contents of information searched (by information source)

28

scored higher than the overall figure for all types of information, and the standpoints of product details as well as insurance premium were higher for

five of the types of information excluding “channel information.” [Figure 3-16]

Furthermore, the standpoint of companies’ management situation scored high

for five of the types of information excluding “product information,” with “management information” scoring 68% and standing out in particular among

different standpoints, indicating that the contents of information that people

search for differs depending on the standpoint of comparison and examination.

6-3. The Level of satisfaction and loyalty, and the contents of information

searched As we have seen, the information that consumers search for differs

depending on the attribution of the consumer, the type of product that they take

out, the timing of purchase, as well as the standpoint of comparison and

examination, but what kind of effect does the content of information that consumers search for have on their level of satisfaction with the product they

purchased and their loyalty? Looking at the level of satisfaction by the content

of information searched, “satisfied” scored high among those who searched for

company reputation, management information, best seller information or

general information. By the number of types of information searched, “total

66.2

69.7

69.2

70.3

82.5

75.0

87.5

88.9

89.1

89.3

90.0

91.2

29.0

32.4

31.2

30.7

43.1

39.7

26.7

29.7

29.3

28.6

67.5

44.1

20.8

22.9

22.5

22.1

43.1

29.4

7.0

7.2

8.0

7.2

13.8

16.2

0 10 20 30 40 50 60 70 80 90 100

Those who

comparedwith other

companies TOTAL

(n = 862)

Contents ofproducts(n = 737)

Insurance amount(n = 679)

Insurance premium(n = 747)

Status of the

company's'management

(n = 160)

Discount benefits

andpreferential

treatment services

(n = 68)

General information Product information

Best seller information Management information

Company reputation Channel information

%

Figure 3-16 Contents of information searched (by the standpoint of making comparisons and examining)

29

satisfaction” was the highest for those who searched 4 types of information at 84%, followed by three types and five types with more than 80% respectively.

[Figure 3-17] However, focusing on “satisfaction,” the more types of

information people searched for, the higher the satisfaction level was, and this

may imply that receiving various information has the effect to raise the level of satisfaction. As for loyalty, from the two perspectives of the intention to keep

their policy and the intention to recommend their policy, the intention to keep

was high for those who searched general information, product information or

company reputation, while the intention to recommend was high for those who

searched for best seller information, management information or company reputation. Moreover, by the number of information searched, the more types

of information people searched for, the higher the intention was of both

keeping and recommending.

From the above, it can be said that in order to improve the level of

satisfaction and gain the loyalty of consumers, it is necessary to encourage

people to search for a broad range of information including the reputation of

the company or the channel, and to provide support so that they can correctly

understand and digest the information they collected.

7.0

8.2

7.0

9.7

11.6

12.8

10.6

5.9

5.9

7.8

12.1

20.8

21.7

33.5

33.4

34.6

43.0

41.9

37.2

40.4

30.2

34.2

37.0

47.9

41.6

43.5

40.5

41.6

41.6

52.7

53.5

50.0

51.0

36.1

40.1

44.7

60.0

62.3

65.2

0 20 40 60 80 100

Want to recommendRather want to recommend

%

35.5

37.7

35.9

37.6

40.7

42.7

41.7

33.0

36.6

37.3

36.4

51.9

65.2

48.1

48.1

49.7

46.7

46.1

45.4

41.7

47.1

49.2

51.2

52.9

41.6

21.7

83.6

85.8

85.6

84.2

86.8

88.1

83.4

80.0

85.7

88.5

89.3

93.5

87.0

0 20 40 60 80 100

Want to keepRather wish to keep

％

13.7

15.2

14.1

17.1

18.5

19.5

15.9

12.3

12.9

14.6

19.3

24.7

43.5

58.8

59.3

61.7

59.4

62.3

59.5

58.9

53.5

64.5

66.8

64.3

57.1

34.8

72.5

74.5

75.8

76.5

80.8

79.0

74.8

65.8

77.4

81.4

83.6

81.8

78.3

0 20 40 60 80 100

Overall(n = 2783)

General information

(n = 1651)

Product information(n = 2073)

Best seller information

(n = 463)

Management information(n = 432)

Companies' reputation

(n = 328)

Channel information

(n = 151)

1 type(n = 1393)

2 types

(n = 828)

3 types(n = 322)

4 types

(n = 140)

5 types(n = 77)

6 types

(n = 23)

SatisfiedRather satisfied

Co

nte

nts

of in

form

atio

n s

ea

rche

dN

o.o

f type

s o

f info

rma

tion

se

arc

he

d％

Level of satisfaction Intention to keep policy Intention to recommend policy

Figure 3-17 Level of satisfaction and loyalty

30

Chapter 4: The Process of Comparison and Examination at the

Emotion Stage

In this chapter, we will focus on the stages of Comparison and Examination

as the next step for consumers in the process of taking out life insurance.

1. The actualities of consumers’ actions of comparison

As we have seen in the previous chapter, consumers are performing External

Searches using various information sources. So how much do consumers who

gained information that would contribute to making comparisons and

examinations through this string of information search activities, actually

compare when they consider which product or from which company they will

get assurance?

Looking at the behaviors taken when considering taking out their insurance

according to the results of a previously conducted focused group interview,

consumers seem to request materials from multiple companies and use

comparison sites to compare prospective life insurance companies from which

they might get insurance as can be seen below.

・ I requested brochures from those I found on the Internet and thought

might be good, and compared them (male, 37)

・ I received free consultation from a FP and learned many things, and then

looked up the company with which I already have a contract on a

comparison site, along with other companies I found on the Internet or

that I learned from WOM (male, 40)

Meanwhile, as can be seen from the following comments, there are

consumers who do not compare multiple companies but take out insurance

upon comparing multiple plans proposed by the same agent (company).

・ I found different plans in my mail box a couple of times so I called the

sales agent and took out a policy upon consulting the agent (female, 56)

This indicates that there are two patterns when it comes to making

comparisons prior to taking out life insurance policies; one in which different

products of the same company are compared and the other in which products of

multiple companies are compared and examined. Looking at the consumers’

experiences of making comparisons at the time of taking out their most recent

policy according to the quantitative survey conducted by our company, overall,

“did compare” accounted for 35% and “did not compare” accounted for 57%.

[Figure 4-1] Furthermore, among those who did make the effort to compare

when considering taking out insurance, there were more of those who

“compared within the same company,” with those who “compared within the

same company” accounting for 25% and those who “compared two or more

companies” accounting for 9%. Looking at the figures according to the timing

31

they took out their most recent policy, those who replied that they “Did

compare” accounted for 26% of those who got insurance in or before 1997,

while the ratio was 49% of those who got insurance in or after 2011, showing

that the more recent the timing of taking out their insurance was, the more

people there were who made the effort to compare when they were considering

taking out insurance. Looking at the contents of the comparisons people made,

while the ratio of those who “compared within the same company” has not

changed much over the years, always accounting for 20% to 30%, the figures

show that the act of comparing between multiple companies is gradually

increasing with the ratio of those who “compared two or more companies”

rising from less than 5% of those who took out insurance in or before 1997, to

20% of those who got insurance in or after 2011.

As for the number of companies that those who made the effort to compare

actually compared, looking at the number of companies that those who

“compared two or more companies” actually compared, overall, “three

companies” accounted for 45% while “two companies” did 25%, and the

average was 3.43 companies, meaning approximately 70% of respondents had

compared between two to three companies. [Figure 4-2] Looking at the figures

by the timing they took out their most recent policy, the ratio of those who

compared “four or more companies” grew from 12% for those who took out

their policies between 1998 and 2002, to 34% for those who took out their

policies in or after 2011, showing the trend that the more recent the timing of

when people took out their policies, the more companies they compared. Also,

25.4

28.8

25.4

30.5

29.5

22.1

9.1

20.4

12.5

6.8

5.4

3.5

56.7

42.5

49.9

50.2

56.8

68.5

8.8

8.3

12.3

12.6

8.3

5.9

0% 20% 40% 60% 80% 100%

Overall(n = 4021)

in or after2011

(n = 798)

2008-2010(n = 808)

2003-2007

(n = 604)

1998-2002(n = 315)

in or before1997

(n = 1145)

Compared within the same company Compared 2 or more companies

Didn't compare NA/DK

34.5

49.2

37.9

37.3

34.9

25.6

<Figure 4compared 2 or more companies>

Figure 4-1 Status of making comparisons when considering taking out

a policy most recently

32

looking at the average number of companies compared by the timing of when

people took out their policies, counting “compared within the same company”

as one company, those who took out their policies in or before 1997 compared

1.28 companies, while those who got insurance between 2003 and 2007

compared 1.44 companies and those who got insurance in or after 2011

compared 2.09 companies, meaning that those who became policyholders in or

after 2011 compared two or more companies on average before taking out their

insurance. It seems that for consumers who are inclined to compare, comparing

life insurance products has come to mean comparing between companies.

[Figure 4-3] That said, as shown in Figure 4-1, those who “did not compare”

when considering getting insurance still accounted for approximately 40%

even for those who took out insurance in or after 2011, while those who

“compared two or more companies” accounted for merely 20%. This implies

that it is necessary to note that the act of comparing companies cannot yet be

deemed as a common consumer behavior at the stage of considering taking out

life insurance.

24.5

20.9

23.8

19.5

52.9

35.0

45.2

44.8

44.6

53.7

35.3

42.5

24.0

24.5

28.7

22.0

5.9

20.0

6.3

9.8

3.0

4.9

5.9

2.5

0% 20% 40% 60% 80% 100%

Overall

(n = 367)

in or after 2011

(n = 163)

2008-2010(n = 101)

2003-2007(n = 41)

1998-2002(n = 17)

in or before 1997(n = 40)

2 companies 3 companies4-5 companies 6 or more companies

Avg. (cos)

3.43

3.62

3.39

3.42

2.94

3.05

Figure 4-2 Number of companies compared by those who compared 2 or more companies

1.64

2.09

1.79

1.44

1.30

1.28

0.0 0.5 1.0 1.5 2.0 2.5

Overall (n = 1389)

in or after 2011 (n = 393)

2008-2010 (n = 306)

2003-2007 (n = 225)

1998-2002 (n = 110)

in or before 1997 (n = 293)

# of Companies

Figure 4-3 No. of companies compared

33

2. Where the factors that support the act of comparing lay

As has been seen above, so far, the act of comparing multiple companies at

the time of considering taking out a life insurance and then purchasing one

cannot be regarded as a mainstream action taken by consumers. Mr. Mochino

of Amviy Communications who proposed the AISCEAS model has remarked

on the limits of the theory that “AISCEAS is (merely) a model analyzing only

a small part of purchasing behaviors” and that “the only time the purchasing

behavior of AISCEAS is taken is simply for products or services with high

functional value.” Insurance products differ from fashion items or beverages

which people would purchase if they feel the product might suit them, and it

can be said that it is a product with high functional value that fits the AISCEAS

theory in the respect that gaining the understanding that the product suits

oneself from brochures or explanations of sales agents leads to taking out a

policy. So what is the reason behind the fact that the number of consumers

comparing companies during the process of taking out a life insurance has not

increased dramatically even though the environment for consumers to compare

life insurance products is now more advanced than ever with the spread of the

Internet and the progresses made in the respective companies’ information

disclosure?

In order to narrow down the candidate products to be purchased by

comparing their functions, it can be imagined that knowledge to judge the

superiority or inferiority of products also becomes necessary. Looking at the

policyholders who have made the effort to compare classified by the timing of

when they took out their most recent policy as shown in Figure 4-1 by the level

of their knowledge on life insurance, the higher the level of their knowledge,

the higher the ratio of those who did compare were for all of those who had

compared as well as for those who had compared two or more companies,

regardless of the timing of when they took out their policies. [Figure 4-4]

Furthermore, focusing on the differences by the timing of when they took out

their policies, “did compare” tended to rise in general as the timing of when

they got their insurance became more recent, regardless of the knowledge level.

[Figure 4-5] This trend is even more notable for those who “compared two or

more companies,” as can be seen from the fact that among those who took out

their policies in or after 2011 with high knowledge and who made the effort to

compare, more than half compared between multiple companies when

considering taking out insurance. From the above, it is conceivable that the reason why not many consumers are comparing life insurance products

although they are “products with high functional value,” is that many people

do not have the knowledge necessary to make the comparisons.

34

As has been seen, the number of consumers making the effort to compare

when considering taking out insurance is gradually increasing. Perhaps the fact

that people are gradually becoming aware of the environment such as the existence of comparison sites that allow people to obtain knowledge to make

comparisons or to easily, albeit insufficiently, make comparisons even if they

did not have knowledge, is the reason why the number of people who have

made comparisons is rising in recent years. As far as the situation goes, for consumers, insurance will be, in the not too far future, regarded in general as

something that they would “take out upon comparing multiple companies” just like other products.

3. Consumers’ sense of conviction

As we saw in the preceding section, the number of consumers making the

25.4

29.8

28.8

16.9

9.1

16.6

7.0

3.5

56.7

41.9

55.1

74.2

8.8

11.7

9.0

5.4

0% 20% 40% 60% 80% 100%

Overall(n = 4021)

High level of

knowledge(n = 1336)

Medium level ofknowledge(n = 1437)

Low level ofknowledge(n = 1240)

Comparison within the same company Compared 2 or more companiesMade no comparison NA/DK

34.5

46.4

35.8

20.4

Figure 4-4 Status of making comparisons when considering taking out an insurance most recently (by level of knowledge)

15.3

28.3

21.224.8

30.6

27.0

34.9 41.3

38.3

46.7

35.2

41.746.2 46.9

60.9

0

10

20

30

40

50

60

70

in or before

1997

1998-2002 2003-2007 2008-2010 in or after

2011

Low level of knowledgeMedium level of knowledgeHigh level of knowledge

% Did compare

2.1

3.8

2.4

5.1

8.7

2.2

1.9

4.6

12.214.4

6.5

10.7

13.2

18.3

31.5

0

5

10

15

20

25

30

35

in or before

1997

1998-2002 2003-2007 2008-2010 in or after

2011

% Compared 2 or more companies

Figure 4-5 Changes in the status of comparisons made by the level of knowledge

35

effort to compare insurance policies when considering purchasing one is gradually rising. Furthermore, as we saw in detail in the preceding chapter,

these actions of comparison seem to be taken based on information searched

from various information sources as well as the consumer’s own knowledge.

Then, to what extent do consumers who search for information and make comparisons to examine the policies understand the insurance product and

policy plan when they take out a policy, or on what kind of contents do we

need to have them deepen their knowledge so that they can be convinced about

their choice of product? In this section, we will go over consumers’ level of

knowledge of insurance at the time they took out their most recent policy mainly based on the results of a survey conducted by our company.

3-1. Knowledge level at the time of considering taking out a policy In the survey, we placed 14 items as shown in Figure 4-6 and asked

consumers which items they thought they had understanding through sales

agents or information materials at the time of their purchases. The results show

that, overall, “the kind of assurance I need” scored the highest with 56%,

followed by “the characteristics and plan of the insurance” (52%) and “the

insurance money/benefit payment requirements” (43%) in this order. The ratio

of those who answered “none of the above” was only about 10% which is a

small number, and almost all consumers took out their policies upon

understanding the contents of one or more of the 14 items, however, the fact

that the highest rate of people who replied they had knowledge of a particular

item at the time they took out their policy was merely about a half of the

respondents, implies that consumers do not necessarily have a full

understanding of the insurance they are purchasing when they are getting it.

Looking at these results by attribution, women in their 30s or 60s and above relatively had more items they understood. [Figure 4-7] By product type, while

approximately half of those who took out medical/nursing insurance or a death

49.3

41.4

36.3

13.8

11.9

11.5

10.6

10.5

7.9

6.8

6.3

4.1

3.7

2.9

17.3

0 10 20 30 40 50 60

The assurance I need

The characteristics and plan of the insurance

The insurance money/benefit payment requirements

Advantages and disadvantages compared to other life insurance

Deduction of insurance premium from income

Items to be announced

About the insurance company, etc.

The procedures of various measures after taking out the policy

About cooling-off

About the cancel deduction

Advantages and disadvantages compared to other financial products

The characteristics of the company compared to other financial institutions

The tax at the time of receiving insurance money

About the conversion system

None of the above

%

N=4021

Figure 4-6 Items understood at the time of taking out policy

36

protections understood “the kind of assurance I need,” the ratio was limited to less than 40% for those who took out savings or annuity products, revealing

that there is a difference in the level and contents of understanding depending

on the product as well. By the channel through which consumers took out their

insurance, the level of understanding of those who went through independent Insurance Shops or financial planners was higher in general than the overall

figures, with approximately 70% saying they understood “the kind of

assurance I need” and around 50% understanding “the characteristics and plan

of the insurance.” Furthermore, with those replying they understood “the

insurance money/benefit payment requirements” and the “Advantages and disadvantages compared to other life insurances” at approximately 30 to 50%,

the results show that the advantage of offering products of multiple companies

seems to be understood by the consumers.

Meanwhile, looking at the figures by the reason motivated consumers to

reconsider getting insurance, while the group led by reviewing their life plans or family finances, or by commercial or direct mail showed a high rate of understanding with 40% to 50% saying they understood “the insurance money/benefit payment requirement” and over 20% replying they understood the ‘Advantages and disadvantages compared to other life insurance,” the group led by solicitation showed a lower rate of understanding with less than 20% saying they understood the contents of all but the top 3 items, and only about 40% replying they understood “the kind of assurance I need” and “the insurance money/benefit payment requirements” respectively, although more than half did say they understood “the characteristics and plan of the insurance.” [Figure 4-8] Does this not imply that in order to have potential clients gain full understanding, it is not enough if to simply repeat explanations, but it is

(%)

N

The

assuranc

e I need

The

characteri

s tics and

plan of

the

insurance

The

insurance

money/be

nefi t

payment

requirem

ents

Advantag

es and

disadvant

ages

compared

to other

l i fe

insurance

Items to

be

announce

d

Deductio

n of

insurance

premium

from

income

About the

insurance

company,

etc.

The

procedure

s of

various

measures

after

taking out

the pol icy

About

cool ing-

off

About the

cancel

deduction

Advantag

es and

disadvant

ages

compared

to other

financia l

products

The

characteris t

ics of the

company

compared

to other

financia l

insti tutions

The tax at

the time

of

receiving

insurance

money

About the

convers io

n system

None of

the above

Total 4021 49.3 41.4 36.3 13.8 11.9 11.5 10.6 10.5 7.9 6.8 6.3 4.1 3.7 2.9 17.3

Male 2000 48.2 40.1 33.1 14.6 13.3 9.5 10.6 9.5 6.1 5.7 7.2 4.5 3.9 3.0 18.5

Female 2021 50.4 42.6 39.4 13.1 10.5 13.5 10.7 11.6 9.6 7.9 5.5 3.8 3.4 2.8 16.2

in their 20s 298 49.0 42.3 32.9 17.1 11.7 11.1 10.1 12.4 9.7 6.4 6.4 3.0 2.0 2.0 22.5

in their 30s 873 52.6 42.8 36.4 15.6 15.5 10.9 10.2 10.2 8.9 7.9 8.0 5.3 4.6 2.7 16.2

in their 40s 917 49.6 40.9 36.2 14.3 11.6 9.7 8.9 10.8 7.7 5.7 6.0 4.6 4.1 2.5 19.4

in their 50s 956 48.7 40.4 34.1 11.6 9.0 10.0 10.4 8.9 6.3 6.7 4.9 3.8 2.0 2.5 16.3

in their 60s or above 977 46.6 41.1 39.4 13.0 12.0 15.3 13.0 11.7 8.0 7.1 6.4 3.3 4.5 4.0 15.8

Medica l/nurs ing care 1765 54.6 41.2 37.7 15.3 9.5 12.9 10.4 10.9 7.1 4.3 4.6 3.7 2.4 2.1 15.5

Death benefi t 1544 48.7 41.8 34.7 12.9 11.9 11.3 10.5 10.4 7.8 8.0 7.0 4.3 4.3 4.0 18.1

Savings 404 36.1 40.1 35.1 12.4 15.8 7.9 12.4 8.9 10.1 9.4 7.2 3.0 5.4 1.7 21.5

Personal pens ion 287 39.0 41.1 37.6 12.2 21.6 8.7 10.5 10.5 9.8 12.2 11.8 6.6 5.2 3.1 17.4

Direct wri ting agent 1808 47.8 41.4 35.2 10.6 11.7 11.2 8.8 8.9 7.4 7.2 5.1 3.2 2.8 4.8 18.2

Point of contact 255 45.1 44.7 37.6 11.4 10.2 9.4 14.5 9.4 5.5 6.3 4.3 6.7 7.5 1.6 13.3

Direct sa les channel 747 53.5 41.8 39.4 17.4 10.8 11.2 11.0 13.7 6.2 2.5 6.2 5.0 3.9 0.9 12.2

of which through postal mai l 369 53.7 43.9 43.6 19.2 11.4 10.8 11.9 13.6 6.0 1.9 4.1 5.1 2.4 0.8 12.5

of which through internet 270 55.2 39.6 35.2 17.0 11.9 11.9 9.3 12.2 7.0 3.7 8.1 4.4 5.2 0.7 12.2

of which through ca l l centers 108 49.1 39.8 35.2 12.0 6.5 11.1 12.0 17.6 4.6 1.9 8.3 5.6 5.6 1.9 11.1

Banks etc. 219 41.6 42.0 40.6 15.1 20.1 9.1 15.5 11.9 13.2 17.4 13.2 5.0 6.4 1.4 12.8

Insurance s tores shared by

multiple companies134 69.4 61.2 47.0 29.1 13.4 17.9 14.2 14.2 21.6 17.2 10.4 6.0 4.5 1.5 2.2

Insurance agents 124 52.4 46.8 43.5 23.4 12.1 19.4 12.1 11.3 12.9 9.7 10.5 4.8 3.2 0.8 13.7

FP 168 69.6 53.6 44.6 36.3 11.3 19.0 12.5 10.7 13.1 13.1 15.5 7.1 5.4 4.2 6.0

Figure 4-7 Items understood at the time of taking out policy (by gender, by age group, by product type)

37

necessary to get the consumers to have the will to understand from their side. Indeed, among the group that was prompted because they were solicited, looking at the level of knowledge by the actions consumers took when considering taking out an insurance, it could be seen that the level of knowledge of those who thought about the necessity of assurance or who reviewed the types and/or cost of assurance was as high as that of those who were prompted by life plans or advertisement. [Figure 4-9]

3-2. The importance of having consumers deepen their knowledge

through comparison and examination So, what do consumers need to understand for them to become convinced

about the policy they take out? Looking at the level of satisfaction from the perspectives of necessity and price adequacy by the items consumers had

(%)

N

The

assuranc

e I need

The

characteri

s tics and

plan of

the

insurance

The

insurance

money/be

nefi t

payment

requirem

ents

Advantag

es and

disadvant

ages

compared

to other

l i fe

insurance

Deductio

n of

insurance

premium

from

income

Items to

be

announce

d

About the

insurance

company,

etc.

The

procedure

s of

various

measures

after

taking out

the pol icy

About

cool ing-

off

About the

cancel

deduction

Advantag

es and

disadvant

ages

compared

to other

financia l

products

The

characteris t

ics of the

company

compared

to other

financia l

insti tutions

The tax at

the time

of

receiving

insurance

money

About the

convers io

n system

None of

the above

Total 4021 49.3 41.4 36.3 13.8 11.9 11.5 10.6 10.5 7.9 6.8 6.3 4.1 3.7 2.9 17.3

Li fe event 1569 51.8 40.6 35.1 14.9 12.7 10.5 11.2 11.2 7.8 7.1 6.8 4.8 4.1 2.9 16.8

Reviewing l i fe plan/fami ly

finances701 59.1 52.9 44.4 23.7 17.3 17.4 12.3 14.0 13.1 11.0 11.3 6.8 6.1 3.9 7.4

Sol ici tation 651 43.3 50.7 41.2 13.4 13.8 14.0 10.6 12.9 11.8 12.7 7.8 4.6 3.5 6.6 12.7

WOM 577 51.5 47.5 43.5 18.2 13.7 13.3 11.1 13.2 8.0 6.9 6.9 6.6 5.4 2.9 11.3

CM, DM 471 56.5 51.6 48.2 20.8 13.2 15.9 15.7 16.1 6.6 5.5 8.3 6.4 3.0 1.7 9.8

Income rise 371 50.4 52.0 51.2 17.8 12.4 16.7 12.4 10.0 11.1 11.1 10.0 6.7 5.1 3.5 10.0

Figure 4-8 Itembs understood at the time of taking out policy (by reason of considering getting insurance)

2.22

2.98

3.43

3.39

3.56

1.55

2.93

3.42

4.07

3.80

3.85

2.06

2.47

3.33

4.52

3.62

4.07

1.77

2.49

3.24

3.81

3.53

3.66

1.67

2.69

3.06

3.75

3.26

3.72

1.71

2.70

3.06

3.62

3.40

3.48

2.36

0.0 1.0 2.0 3.0 4.0 5.0

Life event TOTAL (n = 1569)

Considered necessity of assurance (n = 663)

Reviewed contents and/or costs of product (n = 396)

Searched for companies and/or products (n = 432)

Compared and examined companies and/or products (n = 328)

Did not do anything (n = 412)

Reviewing life plan/family finances TOTAL (n = 701)






Solicitation TOTAL (n = 651)






WOM TOTAL (n = 577)






CM, DM TOTAL(n = 471)






Income rise TOTAL (n = 371)






Life

eve

nt

Re

vie

win

g life

pla

n/fa

mily

fina

nce

sS

olic

itatio

nW

OM

CM

, DM

Inco

me

rise

Items

Figure 4-9 Number of items understood at time of taking out policy (by the reason why they considered getting insurance, by the actions they took when considering taking out the insurance)

38

understood at the time of taking out their policies, the level of satisfaction in terms of necessity was 13 points higher than the overall average for those who understood the “Advantages and disadvantages compared to other life insurances,” and 12 points higher respectively for those who understood “the procedures of various measures after taking out the policy” and “the kind of assurance I need.” Meanwhile, in terms of price adequacy, the level of satisfaction was 15 points higher than the overall average for those who understood the “Advantages and disadvantages compared to other life insurances” was and 14 points higher, respectively, for those who understood the “Advantages and disadvantages compared to other financial products” as well as “the characteristics of the company as opposed to other financial institutions.” [Figure 4-9] Moreover, looking at the results by the number of items consumers understood, for all levels of satisfaction, the more items they understood, the more satisfied they were, and especially for the group that understood four or more items, the level of satisfaction was high with 90% convinced of the necessity and more than 80% satisfied in terms of price adequacy. [Figure 4-10]

As we have seen, having consumers deepen their knowledge on various

aspects in advance when they take out insurance by having them compare and examine the products can be effective in raising the consumers’ level of

satisfaction with the contents and price adequacy of the product they take out.

Because there are various regulations on soliciting insurance, we tend to

prioritize leaving evidence in order to avoid unnecessary troubles, however,

perhaps grasping the consumer’s interests and deepening their knowledge by

12.3

17.9

15.9

15.4

21.6

18.6

17.1

19.9

21.9

18.7

16.5

21.3

25.5

25.9

13.8

5.4

11.0

10.7

14.5

16.3

29.6

55.5

60.0

63.3

61.8

61.5

54.7

56.7

60.4

58.0

56.0

54.6

60.6

56.4

53.7

50.0

32.0

56.1

65.1

62.7

64.4

54.6

67.8

77.9

79.3

77.1

83.1

73.3

73.8

80.3

80.0

74.7

71.1

81.9

81.8

79.6

63.8

37.4

67.1

75.8

77.2

80.7

84.3

0 20 40 60 80 100

Definitely yes Yes

%

15.2

22.6

20.2

20.1

27.0

23.2

20.3

27.2

28.1

24.7

22.0

26.0

30.3

32.0

17.2

6.2

12.7

13.1

18.2

22.0

37.9

62.5

66.7

68.3

67.6

63.3

58.9

65.2

59.5

62.0

62.0

58.2

60.6

57.0

54.4

66.4

39.0

64.8

73.6

71.0

68.1

53.9

77.7

89.3

88.5

87.7

90.3

82.0

85.5

86.7

90.1

86.7

80.2

86.6

87.3

86.4

83.6

45.2

77.5

86.7

89.2

90.1

91.8

0 20 40 60 80 100

TOTAL (n = 4021)

The assurance I need (n = 198 1)

The characteristics and plan of the insurance (n = 1663)

The insurance money/benefit payment requirements (n = 1459)

Advantages and disadvantages compared to other life insurance (n = 556 )

Deduction of insurance premium from income (n = 479)

Items to be announced (n = 462)

About the insurance company, etc. (n = 4 27)

The procedures of various measures after taking out the policy (n = 424)

About cooling-off (n = 316)

About the cancel deduction (n = 273)

Advantages and disadvantages compared to other financial products (n = 254)

The characteristics of the company compared to other financial institutions (n = 165 )

The tax at the time of receiving insurance money (n = 147)

About the conversion system (n = 116)

None of the above (n = 706 )

1 item (n = 1202)

2 items (n = 834)

3 items (n = 544)

4-5 items (n = 45 5)

6 or more items (n = 280)

Definitely yes Yes

What w

as understoodN

o.of items understood

%

Lev el of being conv inced of the necessity Lev el of price adequacy

Figure 4-10 Level of being convinced of necessity and price adequacy

39

providing them with explanations has a positive meaning for both the buyer

and the seller.

4. Target and Scope of Comparison and Examination

4-1. The number of competing companies—changes in the consideration

set

As has been shown in section 2 of this chapter, the number of consumers

taking out insurance upon making comparisons is growing as people gradually

start to recognize environments such as comparison sites that allow people to

gain knowledge to make comparisons or to easily, although perhaps not

sufficiently, “compare” even without knowledge.

Among these consumers, there seem to be even those who compare 3 or

more insurance companies, as seen below.

・ “My husband is the type that collects materials and really studies them

so I printed out the websites of all five domestic life insurance

companies and five foreign capital firms and had him read them” (female,

39)

・ “I added the results from searching ‘life insurance’ on Yahoo! to my

favorites and went through the websites of these companies that came up”

(male, 37)

In academic research pertaining to consumer behavior, brands (products)

that consumers consider purchasing are outlined as a set with a hierarchical

structure categorizing (1) all brands (products) existing in this world into (2)

whether or not consumers are aware of its existence (Aware Brands), (3) if they

are aware, whether or not consumers understand also the brand’s (product’s)

characteristics (Processed Brands) and (4) whether or not they would consider

it as something they might actually purchase (Evoked Brands). [Figure 4-11]

According to the results of a survey I conducted with the cooperation of

40

Nomura Research Institute in 2008 that compared such hierarchical structure to

the process of considering taking out life insurance, the respective number of

companies consumers reviewed, including (5) companies examined in detail in

the stage immediately before making the purchase, among the available sets,

was 3.41 companies on average for Aware Brands6 of which consumers

recognized the company names, among which there were 1.41 companies that

became Processed Brands or candidates to consider taking out insurance from,

while there were 1.56 companies that became Evoked Brands or the subject of

examination when consumers actually took out their most recent policies.

Because in the survey, consumers were asked to give the company names that

they recognized by unaided recall with no particular information, unlike aided

recall in which a list of companies is provided, it is likely that consumers came

up with only certain companies that they feel close to psychologically. This

result shows that even taking into consideration the variability of the respective

individuals, most consumers recognize only one to seven life insurance

companies to begin with, and when it comes to the number of prospective

companies from which they would consider taking out insurance, it is limited

to merely one to three. We can assume that whether or not consumers would

consider taking out insurance from the particular company depends on whether

or not the company is included in the first seven at the very least, and

furthermore if it can remain among the three prospective companies. In order

to become a company that is chosen by consumers, perhaps it is necessary to

not only improve awareness from simply increasing exposure but to also make

efforts to become recognized as a name they feel familiar with.

However, although this cannot be established from a one-time survey, there

seem to be cases, despite few, in which companies that were unknown to

consumers prior to their considering taking out insurance are picked up during

searches over the Internet, for example, and result in constituting Processed

Brands or Evoked Brands. Considering that there are consumers who narrow

down the prospective companies from those found through the Internet search

when they are thinking of getting insurance, as seen in one of the previous

examples, it should be also considered as important to know how high the

company’s website appears in Internet search results as well as how the

company is seen by consumer and to make an effort to improve the situation as

necessary.

4-2. Scope of competing products and services The subject of comparisons made by consumers considering taking out life

insurance, is not necessarily limited to companies in the same business.

6 When adding up the numbers, company names that were miswritten were only counted

if it were obvious that it was meant to indicate a specific company.

41

Looking at the products and services that people considered as other ways to

use the fund which they secured to pay the life insurance premium for the

assurance they took out most recently, according to the abovementioned survey,

“deposits and savings” scored the highest accounting for 37%, followed by

“stocks and/or investment funds” (19%), “travel and/or leisure” (15%), “living

expenses” (10%) and “eating, drinking and/or entertainment” (8%) in this order.

[Figure 4-12] Looking at the results by the types of product they took out most

recently, ”sports and/or culture” scored relatively high for savings-based

insurances such as old-age insurance or juvenile insurance, while “personal

pension insurance” scored relatively high for personal pension insurance and

“medical insurance and/or cancer insurance” for medical and/or nursing

insurance, indicating that consumers decide on taking out life insurance as a

result of comparing and reviewing it with other financial products, consumer

goods and services, although the competing product or service differs

depending on the type of product they take out.

Meanwhile, looking at how consumers secured the funds to take out

insurance, “reviewing living expenses” scored the highest with 43%, and one

in four respondents answered “reducing deposits and savings,” showing that

consumers who were squeezing out money by reducing their spending or

digging into their assets accounted for almost 70% of the total. [Figure 4-13]

37.1

18.9

14.8

9.8

8.2

7.5

7.1

6.2

5.9

4.6

39.1

17.8

14.2

9.1

7.6

8.1

6.1

3.6

5.6

3.0

45.5

16.4

18.2

12.7

7.3

5.5

7.3

0.0

1.8

10.9

30.0

22.0

12.0

8.0

8.0

8.0

8.0

2.0

12.0

2.0

33.6

20.4

15.3

10.2

9.5

7.3

8.0

13.9

5.8

5.1

0 10 20 30 40 50

Deposits and savings

Stocks and/

or investment funds

Travel and/or leisure

Living expenses

Eating, drinking and/

or entertainment

Life insurance

Education and/or self-development

Medical insurance and/or cancer insurance

Individual annuityinsurance

Sport and/

or culture

Total (N=439)Death protection (n=197)Savings (n=55)Individual annuity (n=50)Medical/nursing (n=137)

%

Figure 4-12 Competing products/services (top 10 items)

42

Looking at the relation between how consumers secured the fund to take out

insurance and the different ways to use the funds they considered if they would

not get life insurance, for those who reduced deposits and/or savings, “deposits

and savings” and “stocks and/or investment funds” scored relatively high

compared to the overall figures at 36% and 14% respectively, while for those

who secured funds from bonuses and/or one-time income, in addition to

“deposits and savings” (47%) and “stocks and/or investment funds” (30%),

“travel and/or leisure” (35%), ”personal pension insurance,” “eating, drinking

and/or entertainment” and “education and/or self-development” scored

relatively high (14% respectively), and for those who cancelled insurance, “life

insurance” scored relatively high at 16%, implying that the types and scope of

products and services subject to comparison differ also depending on how the

funds were secured. [Figure 4-14]

42.8

26.4

13.0

12.5

3.0

0.9

0.2

8.7

33.5

26.9

16.8

17.8

4.1

1.0

0.0

8.6

49.1

30.9

9.1

7.3

1.8

0.0

0.0

7.3

44.0

24.0

16.0

4.0

2.0

2.0

2.0

20.0

53.3

24.8

8.0

10.2

2.2

0.7

0.0

5.1

0 10 20 30 40 50 60

Reviewingliving expenses

Reducing depositsand savings

Bonuses and/or one-time income

Cancelled insurance

Sold stocks and/or investment funds

Gift, inheritance, etc.

Sold real assets

Others

Overall (N=439)Death protection (n=197)Savings (n=55)Individual annuity (n=50)Medical/nursing (n=137)

%

Figure 4-13 Source of funds for taking out life insurance

43

As has been seen, in the backdrop of consumers taking out insurance, there

are economic sacrifices made both in terms of income and expenses, such as

lessening the amount to be spent on other products and/or services, refraining

from making purchases, reducing living expenses and digging into assets. It

can probably be said that in order to get clients to choose your company’s

products as the way to spend their precious funds, it is necessary to appeal that

it would be worth the sacrifices to be made and that it would be a more

effective way to use their fund compared to getting the products of not only

competitors in the insurance industry and the financial industry including

banks and securities firms, but also of those in the travel industry and leisure

business.

37.1

18.9

14.8

9.8

8.2

7.5

7.1

6.2

5.9

36.2

14.4

16.5

11.2

10.1

6.4

7.4

5.9

7.4

50.0

29.3

12.1

8.6

6.9

9.5

6.0

4.3

2.6

47.4

29.8

35.1

14.0

14.0

8.8

14.0

5.3

14.0

25.5

20.0

9.1

9.1

7.3

16.4

5.5

9.1

5.5

0 10 20 30 40 50 60

Deposits and savings

Stocks and/

or investment funds

Travel and/or leisure

Living expenses

Eating, drinking and/or entertainment

Life insurance

Education and/or self-development

Medical insurance and/

or cancer insurance

Individual annuity insurance

Overall (N=439)Reviewing living expenses (n=188)Reducing deposits and savings (n=116)Bonuses and/or one-time income (n=57)Cancelled insurance (n=55)

%

Figure 4-14 Competing products/services (by source of fund)

44

Chapter 5: Purchase Process in the Action Stage

After the Comparison and Examination comes the Action stage. The

consumer who has gone through the process of comparison and examination of

candidates among the Evoked Brands in the Comparison and Examination

stage, is considered to make the three final decisions of (1) from which

company to take out insurance, (2) through which channel to take out insurance

and (3) what kind of product to take out, before proceeding to the procedure of

signing a contract for a particular insurance. In this chapter, we will focus on

these three decision-making steps in the Action Stage and to go through the

actual situation of decision-making.

First, in the next section, we will focus on (3), the product choice, among the

decision-making steps in the Action Stage. The aim is to reveal the significance

of price (insurance premium) which is an important factor for consumers

making their final product choice.

1. The Importance of Price (Insurance Premium) in Selecting Insurance

Products

1-1. The Significance of “Price (Insurance Premium)” for the Consumer

Under the prolonged deflationary environment, online life insurers and

mutual aid associations have attracted attention because of their low insurance

premium and simple structure and have grown their business. [Figure 5-1]

Meanwhile, the following comments have been made by men and women in

their 20s to 30s in the focus group interview we conducted previously,

indicating that the insurance premium itself is apparently one of the important

factors when it comes to determining from which company to take out

insurance.

110.1

376.6

0

50

100

150

200

250

300

350

400

1995 1997 1999 2001 2003 2005 2007 2009 2011 2013

Total life insurance companies

National Federation of ConsumersInsurance Cooperatives

Note: Indexed w ith 1995 as 100Source: Prepared by the author from the Life Insurance Association's "Monthly Statistics"

and Insurance "Life Insurance Earnings Statistics Issue"

Figure 5-1 Changes in the number of contracts issued by life insurance companies and National Federation of Consumers Insurance Cooperatives

45

・ I can understand that direct sales is less expensive because there is no

sales agent, so I want to take out insurance from a foreign capital firm

that is clearly cheaper (male, 29)

・ My insurance premium will rise at the age of 40, so I plan to cancel my

policy at that timing. If I were to switch now, I’d go for a life insurance

company with lower insurance premium (male, 33)

・ I’ve taken out a policy without understanding anything in the past and

had to cancel because the insurance premium was so high (female, 31)

In the textbook of insurance, it is considered that the insurance premium that

is the “price” of life insurance products, can be divided into pure premium

which is for paying the insurance money and benefit in case of insured events,

and loading premium. Furthermore, is deemed typical to set the price of a

product by estimating the cost for production and distribution of the product

and then adding on the profit, in this order. Although for the seller, it would

seem natural to determine the price based on such calculation procedure,

looking at the “price” from the perspective of the consumer who is going to

purchase (take out) the product (including life insurance), one notices there is a

different aspect than the simple “cost” + “profit.” A luxury brand is a typical

example. Even though there is no physical difference in the material or sewing

technique, consumers at times happily pay higher prices for a certain product

or service. Moreover, when considering where to go on vacation, consumers

seem to worry if they would be able to receive decent service from

accommodation facilities that set their prices much lower than other nearby

facilities. As these examples show, “price” is said to function as a barometer

for consumers to estimate the value of the contents and quality of the product

or service when they do not have sufficient knowledge or information to make

assessments.

Although the abovementioned comment by a consumer, “If I were to switch

now, I’d go for a life insurance company with lower insurance premium,” does

not say he would cancel his existing contract and switch to a new one

“immediately” but would do so only “before the insurance premium rises (at

the timing of renewal),” and while he does show understanding to the fact that

the product becomes “cheaper” because the channel cost is held down as is the

case with mail-order or online type outlets, perhaps there is a sense of concern

behind such comments for the quality (that he fears it may be inferior in

quality) of the “insurance” to pay benefits, for example.

As seen above, looking at the meaning of “price” from the consumer’s

standpoint, it may be that in the case of life insurance products, the

participation rate for households of which is almost as high as 90% and of

which many consumers should have a certain level of knowledge on the price

range, offering products that are extremely more expensive (or cheaper) than

the products of rival companies may not be accepted by consumers unless there

46

is a logical explanation for the insurance premium level that they can

understand, e.g. it comes with “an overwhelmingly sophisticated consulting

service compared to other companies” or that it is “a sophisticated product that

cannot be easily copied by rival companies” or “a standalone product with

lower insurance premium because the channel cost has been held down.”

Considering the popularity of mail-order or online type insurance companies

and mutual aids in recent years, as well as the comments quoted at the

beginning of this section, it seems the insurance premium amount is a strong

appeal point towards people’s decision to take out insurance. So how much

weight are consumers actually placing on insurance premium?

1-2. The Significance of the Insurance Premium as the Final Determining

Factor

According to the Nikkei NEEDS-RADAR Financial Behavior Survey7

conducted by Nikkei Research Inc. in 2013, which asked about the life

insurance or individual annuity people took out in the past three years (or the

most recent purchase for those who took out more than one insurance) what the

determining factor was when they got the insurance, “contents of the product

was good” (hereinafter referred to as “product content”) scored the highest

accounting for 51%, or about half of the respondents, followed by “support of

the sales agent” (30%), “stability of the insurance company,” “trustworthiness

of the insurance company” (28% respectively) and “low insurance premium”

(hereinafter referred to as “insurance premium”) (27%). [Figure 5-2] Looking

at these results by the types of insurance people purchased, the most cited

reason was “product content” regardless of the type of product. However, more

than a few chose “insurance premium” as the final determining factor. In

particular, for those who took out death protection or medical/nursing

insurance, “insurance premium” was one of the two main factors along with

“product content.” Furthermore, comparing among the types of product,

“insurance premium” scored higher at 39% for those who took out

medical/nursing insurance than the 31% for those who got death protections.

As can be seen, although there are differences between the types of insurance,

“insurance premium” definitely seems to be an important element for

consumers when they are considering taking out life insurance.

7 The survey targeted individuals, male and female, aged 20 to 74 living within 40 km of

the Tokyo metropolitan area. The valid number of responses collected was 2,680.

47

Then, will the situation not change in the future? When asked of the factors

that the respondents would focus on when they most recently got coverage,

“insurance premium” scored the highest for medical insurance and cancer

insurance. However, when asked of the factors to focus on if the respondents

would get a new insurance or increase coverage in the future, “product content”

scored the highest with 62%, followed by “insurance premium” at 54%.

[Figure 5-3] “Stability of the insurance company” (40%) came in third

followed by “trustworthiness of the insurance company” (29%) but the gaps

with the top two items are wide. Looking at the results by the level of living

circumstances, although “product content” scored higher than “insurance

premium” regardless of how financially fit consumers were, the difference

between the two factors was 18 points for those that are well off, while it

shrank to 4 points for those with financial difficulties,.

51.4

30.3

28.1

27.7

27.0

10.2

2.7

0.6

0.4

0.2

50.5

30.4

28.9

28.9

30.9

6.4

2.0

0.5

0.5

0.0

60.2

27.6

15.3

21.4

38.8

13.3

4.1

1.0

0.0

0.0

40.7

26.4

33.0

37.4

23.1

12.1

2.2

0.0

0.0

1.1

53.3

40.0

36.0

21.3

10.7

14.7

0.0

1.3

0.0

0.0

0 20 40 60 80

Product contents

Support ofsales agent

Stability ofinsurance company

Trustworthiness ofinsurance company

Low insurancepremium

Simple applicationprocedure

Sales company,agent

Additionalservice

Exclusive servicefor policyholders

Loyalty program

Total (n = 488)

Death protection (n = 204)

Medical/cancer (n = 98)

Savings (n = 91)

Personal pension (n = 75)

%

Figure 5-2 Final determining factor when getting insurance most recently

48

These results seem to indicate that although those having financial

difficulties tend to focus more on the level of insurance premium, they are

price conscious only within the scope of not having to have to compromise in

terms of the contents and quality of the product. Considering the economic

resources of those with financial difficulty, “insurance premium” would seem

to be even more important as an appeal point, however, “insurance premium”

is not necessarily the key factor, and the most important factor may be whether

or not we can offer a product that meets the consumer’s needs without excess

or deficiency.

2. Consumers’ Level of Understanding of the Products and the

Satisfaction with Price Adequacy and Necessity of Assurance

In the previous section, we focused on the price (insurance premium) among

the factors of product selection and reviewed the meaning of price (insurance

premium) as a significant element for consumers in making their final product

selection. In this section, we will look into the consumers’ level of

understanding of the products, including whether or not the consumers were able to fully understand the products in the process leading up to making the

decision of taking out insurance and as to how much they had understood

before they went ahead and got their insurance.

61.6

54.0

39.5

28.5

6.3

5.3

0.6

0.2

0.4

64.3

46.8

40.5

33.3

5.6

5.6

0.8

0.0

0.8

60.4

56.6

39.3

26.6

6.6

5.2

0.6

0.3

0.3

0 20 40 60 80

Product contents


Stability of insurancecompany

Trustworthiness ofinsurance company

Simple application

procedure

Support ofsales agent

Loyalty program

Sales company,agent

Others

Total (n = 474)

Well off (n = 126)

Having difficulties (n = 346)

％

Figure 5-3 Factors people placed weight on when taking out or increasing medical/cancer insurance going forward

49

2-1. Consumers’ level of understanding of products at the time of taking

out insurance

First of all, according to the results of a survey conducted by our company

on how much consumers understood their insurance when they got it, looking

at the top 10 items among the 14 items asking people what they knew when

they got insurance, “The assurance I need” scored the highest with 49%.

[Figure 5-4] This is followed by “The characteristics and scheme of life

insurance” (41%) and “The insurance money/benefit payment requirements”

(36%) in this order, however, excluding these top three items, all other items

scored less than 20% respectively, and the number of items that people replied

they understood was merely 2.2 items on average. By gender, females scored

six points higher than males for “The insurance money/benefit payment

requirements,” and four points higher respectively for “Items to be disclosed at

the time of purchase” and “Cooling-off rule,” while males scored three points

higher than females for “Deduction of insurance premium from income.”

Furthermore, by age group, those in their 30s scored higher than the overall

figures for “The characteristics and scheme of life insurance” and “Deduction

of insurance premium from income.” In addition, those aged 60 and above

scored higher than the overall figures for “The insurance money/benefit

payment requirements,” “Items to be disclosed at the time of purchase” and

“About the handling institution (insurance company, etc.)”

11.5

10.6

10.5

7.9

6.8

9.5

10.6

9.5

6.1

5.7

13.5

10.7

11.6

9.6

7.9

11.1

10.1

12.4

9.7

6.4

10.9

10.2

10.2

8.9

7.9

9.7

8.9

10.8

7.7

5.7

10.0

10.4

8.9

6.3

6.7

15.3

13.0

11.7

8.0

7.1

0 10 20 30 40 50 60

Items to be announcedat the time of purchase

About the handling institution

(insurance company, etc.)

The procedures for various

measures after takingout the policy

Cooling-off

Deduction due toearly cancellation

Total(n = 4021)

Male(n = 2000)

Female(n = 2021)





60s and above(n = 977)

%

49.3

41.4

36.3

13.8

11.9

48.2

40.1

33.1

14.6

13.3

50.4

42.6

39.4

13.1

10.5

49.0

42.3

32.9

17.1

11.7

52.6

42.8

36.4

15.6

15.5

49.6

40.9

36.2

14.3

11.6

48.7

40.4

34.1

11.6

9.0

46.6

41.1

39.4

13.0

12.0

0 10 20 30 40 50 60


The characteristics and scheme

of life insurance

The insurance money/benefit

payment requirements

Advantages and disadvantagescompared to other life insurances

Deduction of insurancepremium from income

%

Figure 5-4 Items understood at the time of taking out insurance

50

Meanwhile, looking at the results by the types of product people took out, those who got medical/nursing insurance scored higher for “The assurance I

need,” whereas those who received an individual annuity scored higher for

“Deduction of insurance premium from income” and “Surrender charges.”

[Figure 5-5] As for the average number of items people understood, those who got death benefits or medical/cancer understood 2.2 items on average, while

the number was 2.3 items for those who took out annuities and 2.1 items for

savings, indicating that although the number was slightly higher for personal

pension, the number of items people understood was generally low, perhaps

implying that some policyholders may be taking out insurance without fully understanding the product.

In the previously conducted focus group interview as well, people

commented on their experiences of taking out insurance without closely

examining its contents, as can be seen below.

・ A sales agent came to my workplace and went ahead and made a life plan for me even though I didn’t ask for it. I thought “maybe that’s what

you do when you start working” and took out the policy without looking

at the plan in detail” (male, 29)

・ I listened to the salesperson and took out the insurance without giving it

49.3

41.4

36.3

13.8

11.9

11.5

10.6

10.5

7.9

6.8

48.7

41.8

34.7

12.9

11.9

11.3

10.5

10.4

7.8

8.0

54.6

41.2

37.7

15.3

9.5

12.9

10.4

10.9

7.1

4.3

36.1

40.1

35.1

12.4

15.8

7.9

12.4

8.9

10.1

9.4

39.0

41.1

37.6

12.2

21.6

8.7

10.5

10.5

9.8

12.2

0 10 20 30 40 50 60


The characteristics

and scheme of life insurance


Advantages and disadvantagescompared to other life insurances



at the time of purchase

About the handling institution(insurance company, etc.)

The procedures for variousmeasures after taking out the policy

Cooling-off

Deduction due to

early cancellation

Total (n = 4021)


Medical/nursing (n = 1765)

Savings (n = 404)

Individual annuity (n = 287)

%

Figure 5-5 Items understood at the time of taking out insurance (by product type)

51

much thought. I still believe “all that matters is that I have coverage and it doesn’t matter where I get it from” (male, 25)

Looking at the actions people took when they got insurance most recently,

namely how people made comparisons and examination, those who compared

two or more companies scored higher for “Deduction of insurance premium from income,” “Items to be disclosed at the time of purchase” and “Cooling-off

rule” than those who compared within the same company or those who did not

compare, and those who did not compare scored lower than the overall figure

for all items. [Figure 5-6]

2-2. Level of satisfaction with price adequacy and understanding of

necessity at the time of taking out insurance Under such circumstances, looking at whether or not people were finally

fully convinced of the necessity of the assurance and the balance of contents

and price (insurance premium), or price adequacy, it can be seen that 78% were convinced of the necessity of the assurance they took out and 68% were of the

price adequacy. [Figure 5-7] Looking at this by the types of product they took

out, of those who got medical/nursing assurance, 82% said they were

convinced with the necessity of the assurance and 74% were satisfied with the price adequacy, scoring higher than those who got death benefits (necessity of

49.3

41.4

36.3

13.8

11.9

11.5

10.6

10.5

7.9

6.8

54.5

49.6

45.3

15.8

12.7

11.6

13.3

13.8

7.5

6.6

62.1

64.3

57.2

42.0

20.2

21.3

21.5

17.7

16.6

14.7

42.7

31.3

26.8

6.7

9.4

8.6

6.9

6.7

5.7

5.2

0 20 40 60 80


The characteristics and

scheme of life insurance

The insurance money/

benefit payment requirements

Advantages and disadvantages

compared to other life insurances

Deduction of insurance

premium from income


at the time of purchase

About the handling institution


The procedures for various measures

after taking out the policy

Cooling-off

Deduction due to early

cancellation

Total

(n = 4021)

Compared within the same

company (n = 1022)

Compared 2 or more companies

(n = 367)

Didn't compare

(n = 2278)

%


(by the status of comparison and examination）

52

assurance: 74%, price adequacy: 60%). As for the items people understood when they took out their policies, taking also into consideration that the

number of items people understood was small in general, it is likely that people

who got medical/nursing products took out their policy with only superficial

understanding compared to other types of products, and there is a risk that this would leave seeds of discontent in the future.

Looking at the number of items understood at the time of getting insurance

by the level of understanding categorized into three levels, as for the necessity of the assurance, those with low level of understanding scored 66%, while

those with medium level of understanding scored 88% and high level of

understanding 91%, showing the tendency that the higher the level of

understanding, the higher the level of satisfaction with the necessity of the

assurance. [Figure 5-8] Similarly, for price adequacy as well, the higher the level of understanding, the ratio of those who believe the contents matches the

price rises, from 56% to 76% and 82%. Furthermore, looking at the results by

the specific items people understood, as for the necessity of the assurance,

those who understood “Advantages and disadvantages compared to other life insurances” and “The procedures of various measures after taking out the

policy” showed a high level of satisfaction of more than 90%, and as for price

adequacy, those who understood “Advantages and disadvantages compared to other life insurances,” “About the handling institution (insurance company,

etc.)” and “The procedures of various measures after taking out the policy” scored high exceeding 80% respectively. [Figure 5-9] As has been shown in

Figure 5-4, these were the items that only a small percentage of policyholders

said they understood at the time of taking out their insurance. Perhaps we can

15.2

13.7

16.0

12.9

19.9

12.3

11.3

13.4

9.2

14.3

62.5

60.5

66.1

62.4

53.7

55.5

49.1

60.6

57.9

54.4

77.7

74.2

82.1

75.2

73.5

67.8

60.4

74.1

67.1

68.6

0 20 40 60 80 100

Total(n = 4021)

Death benefit(n = 1544)

Medical/nursing(n = 1765)

Savings(n = 404)


Total(n = 4021)

Death benefit

(n = 1544)

Medical/nursing

(n = 1765)

Savings

(n = 404)


Definitely yes YesC

on

vince

do

f ne

cessity

Price

ad

eq

ua

cy

%

Figure 5-7 Level of understanding necessity and satisfaction with price adequacy

53

expect to further improve the level of satisfaction at the time of taking out insurance by giving consumers thorough explanation and support so that they

have a deeper understanding of their policy, including the details mentioned

above.

Because of the restrictions of the industry laws, making comparisons with

other companies’ products requires great difficulty, however, for the other

items, we may be able to improve the level of satisfaction of our customers and

have more of them take out insurance by giving them an even more thorough

explanation.

15.2

10.2

15.1

28.0

12.3

8.9

12.2

21.4

62.5

55.4

72.6

62.7

55.5

47.4

64.2

60.7

77.7

65.6

87.7

90.7

67.8

56.2

76.3

82.0

0 20 40 60 80 100

Total(n = 4021)

Low level of understanding

(n = 1898)

Medium level of understanding

(n = 1378)

High level of understanding(n = 735)

Total(n = 4021)

Low level of understanding(n = 1898)

Medium level of understanding

(n = 1378)

High level of understanding

(n = 735)

Definitely yes Yes

Con

vince

d of n

ecessityPrice

ad

equacy

%

Figure 5-8 Level of understanding and satisfaction (by the level of understanding of product)

12.3

17.9

15.9

15.4

21.6

18.6

17.1

19.9

21.9

18.7

16.5

55.5

60.0

63.3

61.8

61.5

54.7

56.7

60.4

58.0

56.0

54.6

67.8

77.9

79.3

77.1

83.1

73.3

73.8

80.3

80.0

74.7

71.1

0 20 40 60 80 100

Definitely yes Yes

%

15.2

22.6

20.2

20.1

27.0

23.2

20.3

27.2

28.1

24.7

22.0

62.5

66.7

68.3

67.6

63.3

58.9

65.2

59.5

62.0

62.0

58.2

77.7

89.3

88.5

87.7

90.3

82.0

85.5

86.7

90.1

86.7

80.2

0 20 40 60 80 100

Total(n = 4021)

Assurance I need(n = 1981)

Characteristics and scheme

of life insurance (n = 1663)

Insurance money/benefitpayment requirements (n = 1459)

Advantages/disadvantages compared to

other life insurance companies (n = 556)

Deduction of insurance incomefrom income (n = 479)

Items to be announced at thetime of purchase (n = 462)

Handling institution (insurancecompany, etc.) (n = 427)

Procedures for various measuresafter taking out the policy (n = 424)

Cooling-off (n = 316)

Deduction due to earlycancellation (n = 273)

%

Convinced of necessity Price adequacy

Figure 5-9 Level of understanding and satisfaction (by the items understood at the time of taking out insurance)

54

3. Decision Making in the Action Stage

Up to the preceding section, we have looked into the meaning of price

(insurance premium) for consumers and the level of their understanding of the

products with a focus on product selection in the Action stage. In this section,

we will attempt to reveal the qualifications of the company or channel that is

chosen by the consumer by focusing, among the decision making process in

the Action stage, on the selection of companies and channels, namely (1) from

which company and (2) through which channel the consumers take out

insurance.

3-1. Reason for choosing the company from which to take out insurance

First, looking at the reasons why people chose the company from which they

took out their most recent policy according to the results of the quantitative

survey conducted by our company, overall, “Trustworthy” scored the highest at

35%, followed by “Low insurance premium” (20%) and “Familiarity” (12%) in

this order. [Figure 5-10] By the type of company people got their insurance

from, for major domestic companies, “Knew the sales agent” (16%) and

“Large company” (15%) scored high compared to the overall figures, while for

nonlife insurers, “Matched my needs the most” (17%) scored high, indicating

that while there are differences between the types of companies, “Trustworthy”

scored the highest for all types of company and it seems that in selecting which

company to deal with, “whether or not the company is trustworthy” seems to

be a major criterion for selection.

34.5

20.0

12.0

10.8

10.0

9.8

9.7

9.3

8.8

8.2

36.5

3.1

10.2

12.8

16.2

5.0

15.0

13.1

9.2

2.7

28.9

20.1

8.6

4.9

13.4

5.9

2.9

7.7

10.4

13.9

26.6

19.0

8.0

11.8

8.7

10.1

8.1

7.0

8.8

12.5

28.6

22.4

7.1

7.1

5.5

5.5

6.3

5.5

9.8

16.5

0 5 10 15 20 25 30 35 40

Trustworthy

Low insurance premium

Familiarity

Well known

Knew the sales agent

Simple application

procedure

Large company

Have dealt with thecompany in the past

Easy to consult

Matched my

needs the most

Total(n = 4021)

Major domestic company(n = 1083)

Domestic SME(n = 596)

Foreign capital(n = 875)

Nonlife insurer(n = 255)

%

Figure 5-10 Reason for choosing the company(top 10 items)

55

3-2. Reason for choosing the channel from which people took out their

insurance

Second, looking at the reasons why people chose the channel they used to

take out insurance, overall, “The attendant was trustworthy” (20%) scored the

highest, followed by “Because it was convenient” (17%) and “The insurance

company was trustworthy” (13%) in this order. [Figure 5-11] Looking at the

results by the channel that people took out their insurance, “The attendant was

trustworthy” scored the highest for those who went through sales agents at

33%, followed by “Because it was a family member or a friend” (19%) and

“The insurance company was trustworthy” (17%), while “Because it was

convenient” scored the highest for those who got insurance over the telephone

or postal mail at 37%, followed by “Could apply anytime” (31%), and “There

was no need to make visits” (27%) at around 30%. Furthermore, for those who

got their policy over the counter, “Procedure could be completed nearby”

scored the highest and for those who took out insurance at insurance shops,

“Could compare many companies” scored the highest, both at 35%. As can be

seen, the reason that matches the characteristics of the respective channels

ranks the highest. However, while “The attendant was trustworthy” and “The

insurance company was trustworthy” ranked high for direct writing agents, the

aspect of efficiency, such as being able to compare between companies, the

abundance of information as well as the certainty of being able to obtain

information ranked higher than the trustworthiness of the attendant or

insurance companies for independent insurance shops, and it should be noted

that the reason for choice is different even among channels categorized as the

same face-to-face channels.

5.8

5.6

5.6

5.6

5.2

3.9

3.4

3.3

2.3

0.5

0.7

4.7

2.9

4.8

8.1

2.7

0.8

2.2

1.6

0.9

3.9

7.1

3.9

9.0

2.7

5.1

1.6

3.1

2.0

22.0

3.4

6.7

1.5

0.4

1.5

2.1

2.3

1.3

0.2

1.8

14.5

3.6

20.6

4.8

24.8

35.2

1.8

12.1

25.9

9.6

13.0

4.1

0.4

4.4

7.0

5.6

1.5

0 10 20 30 40 50

There was no need to

go through a person

Because I could obtain theinformation I wanted to know

Because the insurancepremium was lower

Because I could learn exactly

what I wanted to know

Because of the dedicated

recommendation of the attendant

Could get abundant information

Could compare many companies

There was a discount

on the premium

Could consolidate the contactpoint with other product(s)

Because they come to collect

the money every month

Total (n = 4021)Sales agent, etc.(n = 1932)OTC (n = 255)Telephone/postal mail(n = 477)Stores to visit(n = 165)Internet(n = 270)

%20.4

17.1

13.2

12.4

12.2

11.6

10.5

9.4

6.3

6.3

32.9

9.0

17.1

19.4

9.7

9.2

2.7

12.0

2.2

3.8

17.6

7.8

19.2

5.1

3.1

35.3

11.0

7.1

11.0

3.9

2.7

36.9

13.2

0.4

27.0

1.7

31.2

0.8

15.5

9.0

17.0

10.3

4.8

7.9

6.7

18.2

9.1

18.2

12.1

10.9

1.9

42.2

5.2

1.1

19.6

3.7

39.6

0.7

21.1

4.4

0 10 20 30 40 50

The attendant was trustworthy

Because it was convenient

The insurance companywas trustworthy

Because it was a family

member or a friend

There was no need to make visits

Procedure could becompleted nearby

Could apply at any time

Gave sincere advice

Because I couldchoose by myself

Materials and information

was easy to understand

%

Figure 5-11 Reason for choosing the channel to take out insurance from

56

In fact, in the previously conducted focus group interview, some of the

consumers who got insurance through sales agents commented that they took

out the policy from their trust in the attendant as opposed to examining the

contents of the proposed product as can be seen below.

・ My mother’s acquaintance was selling insurance so I trusted this person

and took out the policy that was recommended (female, 35)

・ The brother-in-law of my superior at work was with an insurance

company and I thought that he could be trusted because he was related to

the boss (male, 32)

Apparently, whether or not they could trust the salesperson they were in

direct contact with, or the insurance company from which they would take out

their policy is a major factor in the criteria for selecting a company or channel

for those who got insurance through personal channels, such as direct writing

agents or sales agencies.

Meanwhile, also among those who currently do not have insurance, there are

people who, although they do wish to fully understand the contents of the

policy and be convinced before taking out insurance, seem to be more inclined

to get to know a seller that they can trust, rather than request materials

themselves and study them carefully, as can be seen below.

・ Rather than reading each policy conditions, I’d like to trust someone and

get insurance from them (male, 35)

・ I don’t want to request materials. I think things are hidden behind slick

sales copies. I’d like to be properly told in words by a person. (male, 28)

As has been described in detail in chapter 4, in the early stages of

considering taking out insurance, consumers proceed with their examination

based on information obtained from WOM, the Internet, and materials they

requested, meanwhile in the Action stage, in which people make the decision to

get insurance and apply for the insurance, many consumers seem to be seeking

human channels they can “trust,” for example, someone who could “give

explanations to their specific concerns in a way that is easy to understand,”

because of reasons, such as (1) they want to have someone answer to their

questions directly or (2) they could feel safe if there’s a “person” as insurance

is not tangible. With consumers who want to have the intervention of a

face-to-face channel, how to earn their trust is perhaps the important challenge

for all such channels.

3-3. The final determining factor in making the decision Then, how much importance do consumers place on trustworthiness of the

company or channel in making the decision to take out life insurance? Looking

at the final determining factor for deciding to take out insurance, “insurance

premium was adequate” scored the highest with 32%, and together with

“contents of coverage was good” (25%), those saying that the product factor

57

was the final determining factor accounted for more than half of the

respondents. [Figure 5-12] By the channel through which people took out

insurance, although the product factor accounted for more than half also for

those who got insurance through sales agents or agencies, the channel factor

(“the support up to taking out the insurance was well directed,” “was

recommended by a sales agent”) also accounted for more than 30% which was

higher compared to those who took out insurance through other channels. It

goes without saying that the quality of the product itself that the consumers are

taking out is important for their making their decisions when they take out life

insurance, however, for human channels, such as sales agents or agencies to be

selected as the contact point where people would apply to get insurance,

perhaps how to win over the trust of consumers is also a significant factor.

4. The Image of the Desired Human Channel

In the preceding section, we focused on the companies and channels and

analyzed the qualifications for becoming the consumers’ company or channel

of choice. The result revealed the most important element for both companies

and channels was trustworthiness. Additionally, while more than half of those

who took out their insurance through a human channel replied the quality of

the product was the final determining factor for getting insurance, the channel

factor also scored high, accounting for over 30%, indicating that winning the

customer’s trust is a key point for human channels. As has been shown in

various surveys, including the Japan Institute of Life Insurance’s FY 2013

Survey on Life Protection, many consumers are still taking out insurance

through human channels, mostly through sales agents, and the sales agent is the most popular channel for those who would consider getting insurance in the

future. [Figure 5-13] How do consumers view human channels? And how is

the recognition affected by the situation when they actually come in contact

with human channels? In this section, we will close in on the desired human

channel by looking into how consumers view sales agents and the impressions

23.4

23.0

26.3

21.4

35.8

28.5

38.8

27.6

42.0

64.8

43.6

58.1

11.9

12.2

20.0

9.6

9.1

6.3

3.6

3.3

1.6

1.5

4.2

2.6

16.3

29.6

4.7

0.6

3.6

1.1

1.6

1.0

2.0

0.8

1.2

1.1

3.9

3.0

2.7

1.0

1.2

2.2

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total(n = 4021)

Sales agent

(n = 1932)

OTC(n = 255)

Telephone/postal mail

(n = 477)

Stores to visit(n = 165)

Internet(n = 270)

Contents of coverage was good Insurance premium was adequate Trustworthiness of the insurance companyWell-directed support Recommendation of sales agent Hopes for service after taking out policyOthers

Figure 5-12 Final determining factor

58

they have of the sales agents they are actually in contact with.

4-1. Image of human channels

First, looking at how consumers view sales agents according to the results of

the quantitative survey conducted by our company, negative images made up

the top three replies with “They’re intrusive” scoring the highest at 49% and “They lose enthusiasm once you’ve taken out the policy” at 41% and “They

sell only products that would benefit themselves” at 41%, although all three

scored less than 50%. [Figure 5-12] Looking at the results by attribution, by

gender, females scored higher for “They’re intrusive,” “They sell only products that would benefit themselves,” “They know about life insurance in detail” and

“They explain to you in an easy to understand way” than males, while by age

group, the higher the age group, the more they tended to reply “They lose

enthusiasm once you’ve taken out the policy.” [Figure 5-14] Furthermore, by

whether or not the consumer has life insurance, those who have coverage scored higher in all items. Looking at the results for those who do have life

insurance by the channel through which they got their most recent policy, those

who went through sales agents scored lower than the overall figures for items

giving a negative image, such as “They’re intrusive” or “They sell only

products that would benefit themselves” and higher for items giving a positive image, such as “They're convenient because you don't have to go out,” “They

know about life insurance in detail” and “They explain to you in an easy to

understand way.” [Figure 5-15] From the fact that those who used sales agents

as an information source when considering taking out insurance also showed a similar tendency, people who do not have insurance actually do not have a

clear image of sales agents, and it may be that coming into some kind of

contact with sales agents could overturn their negative image and they might

come to hold a positive image.

However, even among those who got insurance through sales agents, the only item that scored higher than the negative items was “They're convenient

because you don't have to go out.” Furthermore, for items, such as “They think

in your shoes,” “You can trust them” or “They explain to you in an easy to

understand way,” their scores were merely 5 to 7 points higher compared to that of people with insurance. We can probably say this shows that not

49.7

37.2

5.8

15.5

7.0

22.8

8.8

23.2

2.5

12.8

9.4

19.3

6.6

10.9

7.1

3.0

3.1

14.2

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Where you got your mostrecent insurance (N=3352)

Where you would like

to get insurance (N=4043)

Sales agent Mail-order and online sales Counter of private insurance company/JA, etc.

Post office or mail clerk Bank/securities company Insurance agency

Work place or labor union Others Don't know

Source: Prepared from Japan Institute of Life Insurance’s “FY 2013 Survey on Life Protection”

Figure 5-13 Where the most recent insurance was taken out and where people would get their next insurance

59

necessarily all sales agents have earned the trust of consumers through sales activities based on the customer’s perspective, and there are more than a few

agents who are seen as “intrusive” or “prioritizing one’s own profit” by their

customers.

47.9

39.6

37.8

32.3

28.3

24.6

14.1

14.0

6.0

43.0

36.9

36.3

30.4

27.8

22.9

15.2

14.5

7.5

52.9

42.4

39.4

34.3

28.7

26.4

12.9

13.5

4.5

41.9

30.4

22.3

32.3

22.4

20.6

14.0

14.0

7.7

48.8

40.2

35.2

33.7

26.3

25.5

14.5

15.6

7.5

51.0

43.1

41.1

32.5

27.8

25.4

13.1

13.7

6.3

48.7

41.9

43.2

31.9

32.1

25.1

14.6

14.6

5.7

47.7

40.2

43.9

31.1

31.5

25.5

14.1

12.0

3.1

0 10 20 30 40 50 60

They're intrusive

They sell only products thatwould benefit themselves

They lose enthusiasm once

you’ve taken out the policy

They know about lifeinsurance in detail

They're convenient becauseyou don't have to go out

They explain to you in an

easy to understand way

You can trust them

They think in your shoes

You can trust them and you can’t go wrong

Total (N=5309)

Male (n=2686)

Female (n=2623)

in their 20s (n=840)




60 and above (n=1136)

%

Figure 5-14 How consumers view sales agents

47.9

39.6

37.8

32.3

28.3

24.6

14.1

14.0

6.0

49.3

40.8

41.8

35.5

33.1

28.6

16.2

16.3

6.6

43.4

41.3

35.5

40.9

45.4

36.1

23.2

22.3

9.2

43.6

35.8

25.5

22.4

13.2

12.1

7.5

6.8

4.1

0 10 20 30 40 50 60

They're intrusive

They sell only products that

would benefit themselves


They know about lifeinsurance in detail


They explain to you in aneasy to understand way

You can trust them


You can trust them and

you can’t go wrong

Total(N=5309)

Those with insurance (n=4021)

Those who went through sales agents (n=1808)

Those without insurance (n=1288)

%

Figure 5-15 How consumers view sales agents (by whether or not they have life insurance)

60

4-2. The desired human channel Then what is the image of a human channel favored by consumers and how

can the current situation be improved? How are sales agents who could earn

the trust of clients viewed by consumers in comparison with those who are not

trusted?

In the survey, the customers are given nine items of possible impressions of

sales agents or agencies with which they are in contact since they took out their

insurance and asked how much they agree to these impressions. Comparing the

replies of the group who trust their sales agents to the group who don’t trust

their sales agents to this question, obviously, the trusting group scored higher

on all nine items, and the difference between the two groups was particularly

wider for “There’s a friendly feeling” (+35 pt). “Can expedite the procedure,”

“Is very knowledgeable and my questions are answered immediately” (+31 pt).

[Figure 5-16]

Moreover, looking at the results of asking the qualities people who wish to

go through the sales agent channel to get a life insurance in the future would

hope for among the same options, overall, “Can expedite the procedure” scored

the highest at 84% while “Is very knowledgeable and my questions are

answered immediately” (83%), “There’s a friendly feeling” (83%), and “Can

be reached immediately” (82%) have also scored high, exceeding 80%. [Figure

5-17] Looking at the results by the level of satisfaction with sales agents or

agencies, those who are not satisfied with their current sales agent or agencies

scored much higher than those who are satisfied for “Will remain the contact

person until maturity,” “Can be reached immediately,” “There’s a friendly

feeling” and “Can expedite the procedure.” This may imply that acquiring the

qualities indicated by these items could be the ideal image of the human

61.5

61.4

50.7

48.8

34.4

29.3

26.2

24.5

22.1

78.4

84.0

71.4

70.0

52.7

45.9

42.3

38.7

40.1

52.2

48.6

40.7

39.0

26.4

22.8

19.7

14.6

14.2

0 10 20 30 40 50 60 70 80 90

Can be reached immediately

There's a friendly feeling

Is very knowledgeable and myquestions are answered immediately

Can expedite the procedure

Will be the contact personuntil maturity

Is very knowledgeable about financial

advices besides insurance

Is knowledgeable about information

related to daily life in the community

Makes the effort to comearound often

Can consult the agent aboutother issues in daily life

Total (N=1859)

Trusting group (n=444)

Untrusting group (n=492)

%

Figure 5-16 Impression of sales agent/agencywith whom you have contact with

61

channel desired by the consumer that would lead directly to winning the trust

of customers and improving their satisfaction level.

61.5

61.4

50.7

48.8

34.4

29.3

26.2

24.5

22.1

76.5

78.3

65.5

62.4

44.3

38.5

35.2

30.6

29.5

27.3

21.0

15.4

16.1

14.7

7.7

4.9

10.5

3.5

82.2

83.4

83.4

84.1

72.0

68.2

58.6

44.6

51.6

0 20 40 60 80 100

Can be reached immediately

There's a friendly feeling

Is very knowledgeable and my questionsare answered immediately

Can expedite the procedure

Will be the contact person until maturity

Is very knowledgeable about financial

advices besides insurance

Is knowledgeable about informationrelated to daily life in the community

Makes the effort to come around often

Can consult the agent about other issuesin daily life

Total (N=1859) Satisfied (N=1283) Not satisfied (N=143) Wishes to go through sales agent (N=157)

%

Figure 5-17 Quality expected of sales agents/agencies

62

Chapter 6: The Sharing Process in the Action Stage

Following the action (Action) stage is the sharing stage (Share). In the

Action stage, how do consumers who have gone through the purchase

procedures (closed a contract) evaluate the results of the consideration process

in the preceding stage, and share these results with others? In this chapter, we

will review the situation of such evaluation and whether or not these

evaluations are shared with others in the sharing stage.

First, in the following section and Section 2, we will verify the meaning of

customer satisfaction based on a set of data, then in Section 3, we will review

the actual situation of sharing. Additionally, in Section 4, we will give further

consideration to the meaning of following up after insurance policies are taken

out, in view of the long term nature of life insurance.

1. Customer Satisfaction and Loyalty

1-1. Loyalty differs depending on the level of satisfaction

Although customers are given options of four to five levels from “satisfied”

to “dissatisfied” in customer satisfaction surveys conducted by various

companies, perhaps more often than not, attention is given only to the changes

in the value of the Top-2 Box, or the “total of satisfied” which is the sum of

“satisfied” and “rather satisfied,” when looking at these survey results.

Incidentally, although it is known that a customer’s level of satisfaction is

generally closely linked with actions such as loyalty to the company or

recommendation to others, it is said that the two factors do not necessarily

move in parallel. Rather, they exhibit an upward convex curve for markets and

products with a high cost of switching, such as public services that face strict

regulations and little competition, and a downward convex curve for highly

competitive markets or commodities with low switching cost. [Figure 6-1] As

for life insurance, although competition is fierce, the cost of switching is high

due to the product characteristics. As is shown in Figure 6-2, the intention to

renew for those who were “satisfied” was approximately double of those who

were “rather satisfied,” and the difference was three to eight times for the

intention to reuse and intention to recommend, exhibiting a downward convex

curve for all indices, and it can be seen that there is a wide gap between “rather

satisfied” and “satisfied.” If the goal is to increase the persistency rate by

preventing surrenders, a certain level of success may be expected by focusing only on the Top-2 Box; however, in order to arouse needs and search for

potential customers, perhaps it is also necessary to pay attention to the

disparities between “satisfied” and “rather satisfied,” which show significantly

different readings in terms of expectation levels for purchasing additional

insurance and for WOM or recommendation to others.

63

1-2. Factors leading to differences in satisfaction levels As for the factors leading to differences in satisfaction levels, looking at the

reason people began considering taking out insurance, although “life event”

scored the highest, almost reaching 40%, for both the satisfied group and the

rather satisfied group, those who were satisfied scored slightly higher for

“commercials, direct mails” while they scored lower for “solicitation,” compared to the rather satisfied group. [Figure 6-3] As for actions taken when

considering taking out insurance, in general, the higher the level of satisfaction,

the higher the score was, with the satisfied group scoring 11 points higher for “considered the necessity of assurance,” 7 points higher for “compared companies/products” as well as “searched companies/products,” and 5 points

higher for “considered details/cost of products” respectively, and it can be seen

that the satisfied group is more proactive in making considerations than the

rather satisfied group. [Figure 6-4]

77.8

37.8

18.3

11.9

16.7

44.2

12.4

3.51.71.2

29.0

4.0

1.61.71.20

20

40

60

80

SatisfiedRather satisfiedNeitherRatherdissatisfied

Dissatisfied

Intention to renew

Intention to reuse

Intention to recommend

%

Figure 6-2 Level of satisfaction and loyalty

64

Looking at the items understood at the time of taking out insurance,

although both groups scored higher in more items than those who answered

“neither” or were “dissatisfied,” it could be seen that the satisfied group

understood more items scoring 13 points higher for “the kind of assurance I

need,” 8 points higher for “advantages/disadvantages compared to other life

insurance,” 7 points higher for the “insurance money/benefit payment

requirements,” “procedures of various measures after taking out the policy” as

well as “handling institution (insurance company, etc.),” and 6 points higher

for the “characteristics and plan of the life insurance” compared to the rather

satisfied group. [Figure 6-5] As a result, both in terms of the level of

satisfaction with necessity and price adequacy, the satisfied group scored

significantly higher with 59% and 54% replying “definitely yes,” respectively,

compared to the rather satisfied group (12% and 9%). [Figure 6-6]

39.0

17.4

16.2

14.3

12.7

11.7

9.2

5.7

37.0

22.0

13.4

16.0

9.1

15.6

10.9

8.8

39.9

19.9

16.5

15.5

10.6

12.7

10.1

5.4

37.0

12.9

15.6

12.3

17.8

9.1

7.5

4.6

39.5

11.3

19.2

11.3

15.8

9.6

8.5

6.8

53.6

7.1

22.6

10.7

9.5

6.0

6.0

6.0

0 10 20 30 40 50 60

Life event

Reviewed lifeplans/family finances

Solicitation

WOM

For some reason oranother

Commercials, directmail

Rise in income

Other

Total (n = 4021)

Satisfied (n = 486)

Rather satisfied (n = 2074)

Neither

Rather dissatisfied (n = 177)

Dissatisfied (n = 84)

%

Figure 6-3 Reason for considering taking out insurance (by level of satisfaction)

40.3

29.3

22.7

19.8

55.3

38.9

32.7

30.5

44.6

34.1

26.2

23.2

29.2

19.8

15.0

11.9

31.1

19.2

13.6

10.2

23.8

13.1

4.8

3.6

0 10 20 30 40 50 60

Considered thenecessity of assurance

Considered the details/

costs of product

Searched companies/products

Compared companies/

products

Total (n = 4021)

Satisfied (n = 486)


Neither



%

Figure 6-4 Consideration process at the time of taking out most recent insurance (by level of satisfaction)

65

As mentioned above, there is a tendency to focus only on the value of the

Top-2 Box for use as material to prepare business plans or an indicator for

evaluation measurement. However, there are differences between the satisfied group and the rather satisfied group starting with the actions taken when

getting insurance, and it seems there is a big discrepancy in the level of

understanding of the product they took out as well as the insurance premium.

Then, how are people selecting products all by themselves without relying on

the seller? Asked how adequate it was to say insurance is something that one

49.3

41.4

36.3

13.8

11.9

11.5

10.6

10.5

7.9

6.8

67.9

54.7

49.4

23.5

17.9

17.1

18.1

18.5

13.2

9.9

54.7

49.0

42.5

15.5

12.8

12.9

11.5

11.6

9.1

7.2

36.1

25.4

22.3

8.0

8.3

7.2

6.3

6.0

4.3

5.1

32.8

30.5

31.6

9.6

10.7

9.0

9.6

10.2

4.5

4.5

28.6

26.2

17.9

8.3

11.9

10.7

8.3

4.8

3.6

8.3

0 10 20 30 40 50 60 70 80

The assurance

I need

The characteristics andplan for life insurance

The insurance money/benefit payment

requirements


Items to be announced atthe time of taking out policy

Handling institution


The procedures for various

measuresafter taking out the policy

Cooling off

Deduction for earlycancellation

Total (n = 4021)

Satisfied (n = 486)


Neither



%

Figure 6-5 Items understood at the time of taking out policy (by level of satisfaction)

15.2

59.1

12.4

3.9

6.8

4.8

12.3

54.5

9.0

2.6

3.4

4.8

62.5

37.0

78.1

50.4

49.2

27.4

55.5

42.0

73.4

37.0

27.1

10.7

77.7

96.1

90.5

54.3

55.9

32.1

67.8

96.5

82.4

39.6

30.5

15.5

0 20 40 60 80 100

Total (n = 4021)

Satisfied (n = 486)


Neither



Total (n = 4021)

Satisfied (n = 486)


Neither


Dissatisfied (n = 84) Definitely yes Yes

Leve

l of satisfactio

n

for n

ece

ssityP

rice a

deq

uacy

%

Figure 6-6 Level of understanding of necessity and satisfaction with price adequacy(by level of satisfaction)

66

“gets after inquiring with someone knowledgeable,” the ratio of those who

answered “yes” among the satisfied group was 17% or 12 points higher than

the rather satisfied group (4%). [Figure 6-7] Meanwhile, asked if they were

closer to someone who “researches by oneself until they are convinced or asks

someone knowledgeable,” 42% of the satisfied group replied “closer to A

(research by oneself)” scoring approximately 20 points higher than the rather

satisfied group (25%). It can probably be said that they regard “someone” such

as sales agents as a supplementary source of information to deepen their own

understanding.

In order to improve the level of satisfaction of the rather satisfied group and

to earn their loyalty, perhaps it is necessary to be customer-oriented by

promoting proactive consideration by the customers themselves regarding the

various products and companies starting with the particular consideration on

the necessity of assurance according to the respective situations of each

customer, and sticking with providing information to support their

understanding as necessary, and to hold the stance of offering support so that

they can make a choice that is more satisfactory.

2. What Causes Dissatisfaction?

Over the last five years or so, various efforts have been made to support

(deepen) consumers’ understanding of life insurance, including major

companies having their agents visit existing policyholders after the so-called

non-payment problem or the simplification of medical related special add-on

options. Through such efforts, companies are generally seeing positive effects

on their businesses, such as lower surrender or lapse rates, and it can be

imagined that it is contributing significantly to improving the satisfaction of

policyholders. In fact, in the quantitative survey conducted by our company,

the level of satisfaction of policyholders who took out their most recent

insurance in or after 2008 was 72% overall, which is higher than the 60% for

policyholders who got their insurance in or before 2007. [Figure 6-8] However,

the fact that 3% of policyholders who took out their insurance in or after 2008

25.8

41.8

24.5

19.6

29.4

40.5

54.8

42.6

57.6

58.2

43.5

38.1

16.6

11.1

15.9

19.4

23.2

15.5

2.4

3.9

1.7

2.6

3.4

4.8

0% 20% 40% 60% 80% 100%

Close to A Rather close to A Rather close to B Close to B

5.3

16.5

4.2

2.5

6.2

6.0

21.2

22.4

25.5

14.2

17.5

17.9

26.6

38.9

29.7

16.7

23.7

23.8

0 10 20 30 40 50

Total (n = 4021)

Satisfied (n = 486)


Neither



Yes Rather yes

%

Figure 6-7 "Insurance is something you get after inquiring with someone knowledgeable" "Research by oneself until convinced (A)" or "Ask someone knowledgeable (B)"

67

expressed dissatisfaction in this survey as well may be implying that it is

necessary to continue such efforts to resolve their dissatisfaction. Therefore, in

this section, we will focus on those who were dissatisfied among policyholders

who took out the most recent insurance in or after 2008 and attempt to reveal

what caused their dissatisfaction by making the comparison with those who

were satisfied.

2-1. Insurance premium and type of product taken out by the dissatisfied

group

First, looking at the type of product taken out and the insurance premium

paid, overall, the type of insurance that was taken out the most by

policyholders who got their most recent insurance in the past five years was

“medical/nursing,” accounting for 50%, which was followed by “death

protection,” accounting for over 30%. [Figure 6-9] Looking at this result by the

level of satisfaction, the dissatisfied group scored 18 points higher than the

satisfied group for “death protection” and 11 points lower for

“medical/nursing.” Furthermore, the annual insurance premium paid in total

was 112.6 thousand yen for the satisfied group, while it was 128.7 thousand

yen, or 16 thousand yen higher, for the dissatisfied group. [Figure 6-10] By

product type, for medical/nursing insurance, the dissatisfied group was paying

113.6 thousand yen or 41 thousand yen more than the satisfied group (72.6

thousand yen), while on the contrary, for death protection, the satisfied group

(151.5 thousand yen) was paying 13 thousand yen more than the dissatisfied

group (138.4 thousand yen).

12.1

15.3

16.2

14.1

17.6

11.8

10.5

51.6

56.7

58.5

53.7

55.0

56.3

49.8

29.4

24.5

22.3

28.4

22.5

28.2

30.3

4.4

2.4

1.9

2.6

3.6

2.5

5.8

2.1

0.9

0.8

0.9

0.9

1.3

3.2

0.4

0.3

0.4

0.3

0.5

0.0

0.4

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (n = 4021)

In or after 2008 (n = 1606)

2011 (n = 798)

2010 (n = 348)

2009 (n = 222)

2008 (n = 238)

In or before 2007 (n = 2064)

Satisfied Rather satisfied Neither Rather dissatisfied Dissatisfied No response

Figure 6-8 Level of satisfaction (by timing of taking out most recent insurance)

32.6

31.9

50.0

10.1

10.4

5.8

7.7

7.8

5.8

49.3

49.5

38.5

0.3

0.3

0.0

0% 20% 40% 60% 80% 100%

Total (n = 1606)

Satisfied (n = 1155)


Death protection Savings Personal pension Medical/nursing Other

Figure 6-9 Level of satisfaction (by timing of taking out most recent insurance)

68

The fact that the ratio of those who took out death protection was high

among those who were dissatisfied seems to imply that the characteristics of

the product, which it is more difficult to understand than medical/nursing

insurance, may be a part of the cause for dissatisfaction. It can be said that we

need to be more creative when explaining products offering death protection.

2-2. The dissatisfied group’s process of considering taking out insurance Second, according to the reasons for taking out insurance which we went

through in the preceding section, while “life event” was followed by “review of

family finances/life design” for the satisfied group, “life event” was followed

by “solicitation” and “for some reason or another” in that order for the

dissatisfied group, and we can see that their proactivity and purpose is

somewhat vague compared to the satisfied group. [Figure 6-11]

Furthermore, in terms of the actions taken at the time of getting insurance,

the satisfied group scored more than 10 points higher for all items, and the gap

is particularly wide at 21 points for “compared companies/products” and

“searching companies/products”. [Figure 6-12] Such differences in the actions

taken can also be considered to have an effect on the level of satisfaction.

114.33

112.56

128.65

152.12

151.47

138.44

162.69

164.47

105.00

178.03

175.65

240.00

74.82

72.62

113.63

0 50 100 150 200 250 300

Total (n = 1606)




Satisfied (n = 369)


Savings (n = 163)

Satisfied (n = 120)


Annuity (n = 124)

Satisfied (n = 90)


Medical/nursing (n = 791)

Satisfied (n = 572)


Thousand Yen

Figure 6-10 Annual insurance premium paid for most recent product taken out

34.4

24.8

16.2

13.4

12.9

11.5

10.1

7.3

34.7

26.3

15.5

14.3

13.3

12.5

8.9

7.8

38.5

13.5

21.2

11.5

7.7

7.7

15.4

11.5

0 5 10 15 20 25 30 35 40 45

Life events

Reviewed family finances/life design

Solicitation

WOM

Income rise

Commercials, direct mail

For some reason or another

Other

Total(n = 1606)

Satisfied(n = 1155)

Dissatisfied(n = 52)

%

Figure 6-11 Reason for considering taking out insurance

69

Looking at the items understood at the time of getting insurance as a result

of such differences in the actions taken, although basically the same items

scored high for both the satisfied and dissatisfied groups, it seems that most

policyholders that were dissatisfied decided on taking out insurance without

understanding most of the items even with their highest scoring item, which

was “the kind of assurance I need,” at only slightly over 40% and the rest of

the items scoring less than 30%. [Figure 6-13] Looking at the final determinant

as well, while more than 70% of the satisfied group replied that the

characteristics of the product was the determining factor, with 41% choosing

“the insurance premium was adequate” and 32% choosing “the contents of the

insurance was good,” “I was solicited by a sales agent” scored the highest for

the dissatisfied group at 33% followed by “the insurance premium was

adequate” (23%) and “the contents of the insurance was good” (15%) in that

order. [Figure 6-14] From these results, the dissatisfied group, unlike the

satisfied group, can be considered as lacking proactivity in their reasons and in

the consideration process for taking out insurance and seem to be judging the

price adequacy according to the affordability of the insurance premium and not

whether or not it is reasonable for the coverage to be provided by the product.

48.3

35.1

31.1

29.1

52.4

38.5

34.3

32.6

42.3

25.0

13.5

11.5

0 10 20 30 40 50 60

Considered the

necessity of assurance

Considered the details/

cost of product

Searched the companies/products

Compared companies/

products

Total(n = 1606)

Satisfied(n = 1155)


%

Figure 6-12 Action taken when considering taking out insurance

54.4

48.7

42.2

19.6

15.1

13.1

13.0

11.9

11.8

9.7

59.6

55.2

48.1

22.0

16.5

15.1

14.8

13.6

13.1

10.2

42.3

28.8

19.2

11.5

11.5

5.8

5.8

7.7

7.7

3.8

0 20 40 60 80


The characteristics andplan for life insurance

The insurance money/benefitpayment requirements

Advantages/disadvantages comparedto other life insurance companies

Items to be announced at thetime of taking out insurance


The procedures for various measuresafter taking out the policy

Handling institution(insurance company, etc.)

Cooling off

Deduction for early cancellation

Total (n = 1606)



%


70

2-3. The loyalty of the dissatisfied group

As a result, looking at the intention to renew going forward, while 92% of

the satisfied group had the “intention to renew (total)”, the ratio was 39% for

the dissatisfied group, showing a large difference. [Figure 6-15] Similarly,

while only less than 1% of the satisfied group had the “intention not to renew

(total)” the ratio was 27% for the dissatisfied group and you can see from these

figures the high possibility of dissatisfaction towards the current contract

leading to the action of surrendering the policy despite the many switching

barriers such as surrender charges or the possibility of not being able to replace

their insurance due to changes in the health condition.

It can be imagined that the reason why consumers who took out insurance

over the past five years came to be dissatisfied is because they purchased their

policy as a result of a solicitation by a sales agent without taking any action on

their part to make specific considerations about getting the insurance and

barely understanding its contents. Currently, only a few percent or a very minor

percentage of consumers are clearly expressing their dissatisfaction and most

of the policyholders are content. However, although the number is trivial, once there is a complaint from those that are dissatisfied, it requires more than a

small amount of effort in terms of time and emotional burden to respond, and

even if there isn’t any complaint, the possibility is higher for the dissatisfied

group that they might secede, such as by surrendering their policies. It can

40.4

41.4

23.1

28.5

31.8

15.4

11.5

8.4

32.7

4.4

4.0

3.8

10.5

11.2

3.8

2.1

1.6

7.7

2.4

1.6

13.5

0.2

0.1

0.0

0% 20% 40% 60% 80% 100%

Total

(n = 1606)

Satisfied

(n = 1155)

Dissatisfied

(n = 52)

The insurance premium was adequate The contents of insurance were good

I was solicited by a sales agent The service was appropriate

I could trust the insurance company I could expect service after taking out the insurance

Other No response


Figure 6-15 Intention to renew going forward

35.9

1.7

42.9

0.4

9.6

15.4

47.3

0.6

48.7

0.2

28.8

11.5

83.1

2.3

91.7

0.6

38.5

26.9

0 10 20 30 40 50 60 70 80 90 100

Renew (total)

Not renew (total)

Renew (total)

Not renew (total)

Renew (total)

Not renew (total)

Will renew [Will not renew] Will probably renew [Will probably not renew]

%

Total(N=1606)

Satisfied

(n=1155)

Dissatisfied

(n=52)

71

probably said that we should give consumers sufficient explanation because we

must have them think thoroughly about the necessity of getting insurance and

not rush to closing deals in order to avoid evoking negative actions including

complaints and surrenders. Moreover, we can probably say that efforts to

resolve such dissatisfaction of customers are also required to further improve

their satisfaction level going forward.

3. Situation of Sharing (Share) Pertaining to Life Insurance

Traditionally, it was deemed a taboo to speak about death or money in front

of others or considered bad luck to speak of preparing for death, and perhaps

many believe consumers do not talk with each other about life insurance,

which reminds us of death or after-death, let alone that sellers would be so

blunt as to mention such things as part of a sales pitch. Meanwhile, in light of

the aging of the population and diversifying of values, it can be said that the

tendency to consider talking of death itself as a taboo seems to be waning as

more people are seeking something unique to themselves for their own

after-death such as holding a funeral while they are still alive or requesting a

natural burial.

The same goes for life insurance, as medical insurance or annuities that do

not involve death would not be associated with the abovementioned taboo.

Furthermore, it seems there are more than a few topics that people would not

feel reluctant to talk about including the characters, music, or contents of

commercials. From the perspective of the company, actively becoming the

topic of conversation might be something that they rather welcome, should it

lead to improved brand recognition or awareness of the company or its product.

In consumers’ daily lives, does life insurance ever become a topic of

conversation with someone close? If it does, what are they saying in their

conversation?

In this section, we will review what makes up the core of the stage of

sharing (Share) which is the situation of information sharing between

consumers, in particular, how consumers are generating and using WOM and

how they are spreading the information.

3-1. How WOM related to life insurance is generated According to the quantitative survey conducted by our company, the ratio of

those who have talked about life insurance with someone close was 49% overall, meaning approximately half of them said it had come up in a

conversation in the past and we can see that talking about life insurance can no

longer be called a taboo. [Figure 6-16] Looking at the contents of the

conversations, the “details of coverage” scored the highest at 26% followed by

“company/product I wouldn’t mind taking out” (20%) and “details of the

72

benefit” (18%) in that order. Looking at the specifics of the contents, the

“insurance I have” and “insurance premium paid” topped the list both scoring

15% followed by “the amount of insurance money and benefit” (11%). By

whether or not the people have life insurance, naturally, policyholders were

more likely to talk about insurance and there was a more than 10-point

difference for the “details of coverage,” “details of benefit” and

“company/product I wouldn’t mind taking out.” We can see that in addition to

the product they currently have or the company they are with, the product or

company worth considering also comes up as a topic in daily conversation.

By gender, females in general tended to be discussing various topics, and by

age, the scores were relatively high for “company/product I wouldn’t mind

taking out,” “how to see/read” and “contact point while considering” for those

in their 30s, “details of benefit” and “current events” for those in their 50s and

“contents of insurance” for those aged 60 and above. [Figure 6-17] As seen

above, despite the differences in gender and age, consumers seem to be having

5.2

7.5

5.9

4.5

7.5

6.7

1.1

5.3

4.1

1.1

0.7

3.9

2.7

1.5

6.8

4.2

1.4

0.8

0.7

0.3

6.2

8.9

7.2

5.3

7.6

6.8

1.3

6.0

4.7

1.2

0.7

4.3

3.1

1.6

7.6

4.8

1.3

1.0

0.9

0.3

2.3

3.0

1.8

1.9

7.0

6.6

0.5

3.1

2.3

0.6

0.5

2.7

1.7

1.1

4.3

2.2

1.7

0.3

0.2

0.3

0 10 20 30 40 50 60

About the sales agent

<Reputation of the company>

Life insurance company that paysout quickly

Company that has simple

procedure for receiving benefits

<Advertisement/novelties>

Details of advertisement

Novelties, etc.

<How to see/read>

Basic scheme of insurance

How to read estimates,brochures, etc.

Meanings of expressions, words

<Contact point whileconsidering>

Desirable point of consultation

Contact point at the time ofconsideration

<Other>

Comparison with other financialproducts

Reputation as a place to work

About the insurance shop

Campaigns/seminars

Other

Total (n = 5309)

Policyholder (n = 4021)

Non-policyholder (n = 1288)

%

49.2

25.9

15.3

11.0

15.3

8.9

19.7

9.4

9.1

9.6

17.6

11.3

10.3

4.9

12.8

6.3

5.9

5.7

9.0

5.7

55.7

30.3

18.2

12.9

17.7

10.5

22.8

10.7

10.7

11.0

21.1

13.6

12.3

5.8

14.4

7.1

7.0

6.2

10.4

6.5

29.0

12.1

6.2

5.3

7.6

4.0

10.0

5.2

4.2

5.3

6.8

4.1

4.0

2.0

7.5

4.0

2.6

4.0

4.3

3.0

0 10 20 30 40 50 60

<Would talk about (Total)>

<Details of coverage>

The insurance I have

Life insurance company I got

coverage from

Insurance premium paid

Dissatisfaction with insurancepremium I pay

<Product/company I wouldn'tmind taking out>

A good insurance company

What kind of product is

beneficial

Insurance with price advantage

<Details of benefit>

Amount of insurance money orbenefit

Requirements to receiveinsurance money, etc.

Procedures necessary to receive

payments

<Current events>

Murder or fraud, etc.

The management situation of theworkplace

Scandals

<Of the sales agent>

Experience of being solicited

%

Figure 6-16 Topic of conversation regarding life insurance with someone close

73

various conversations about life insurance. Looking at the contents of WOM

actually exchanged between consumers according to a previous focused group

interview, we can see that various topics are being discussed, including the

types of life insurance, conditions of benefit payments, details of the insurance

coverage the participants held, and the channel they got the insurance through

as can be seen below.

・ When my son’s friend got injured, I heard there were many insurances

such as those that are “paid from the first day” or “paid from the twelfth

day of outpatient visits” (female, 39)

・ I heard that “insurance that are paid only after the fifth day of

hospitalization is useless because you can’t get anything if you’re

released on the third day” (female, 49)

・ I asked a colleague at work “what kind of life insurance do you have”

and “how did you get it” (male, 35)

・ We always end up saying “it’s difficult to continue paying the same

insurance premium after you retire, so maybe it’s better to change the

coverage” (male, 59)

・ A friend of mine and her acquaintances actually became hospitalized and

I heard that it cost more (female, 43)

3-2. Characteristics of consumers who rely on WOM In the comments obtained through the abovementioned focused group

interview, such as “I invited a co-worker from where I work part time to have

coffee and asked the co-worker who is slightly older than I am to tell me the

basics” or “I consulted a colleague from work who is eight years my senior and

whom I could trust,” it could be seen that people were not only having general

conversations but were seeking specific advice from people among their

community who are slightly elder but are in a similar life stage, for example

who have children of the same age or with similar living standards such as

(%)

Ｎ

Would

talk

about

(total )

Detai ls

of

coverage

Product/c

ompany I

wouldn't

mind

taking

out

Detai ls

of

benefi t

Current

events

About

the sa les

agent

Reputati

on of the

company

Advertise

ment/nov

elties

How to

see/read

Contact

point

whi le

cons ideri

ng

Other

Total 5309 49.2 25.9 19.7 17.6 12.8 9.0 7.5 7.5 5.3 3.9 6.8

Male 2686 44.4 21.4 15.4 14.7 12.5 8.5 6.3 6.7 5.2 3.6 5.8

Female 2623 54.2 30.5 24.1 20.7 13.0 9.5 8.7 8.3 5.4 4.1 7.8

in their 20s 840 39.3 15.8 14.3 11.2 8.0 6.2 4.5 9.5 4.4 3.5 7.6

in their 30s 1174 52.5 27.7 22.0 17.1 11.8 8.9 7.4 9.5 6.6 5.6 6.6

in their 40s 1091 50.1 26.2 19.3 15.9 13.1 10.8 6.4 8.5 5.7 3.9 6.2

in their 50s 1068 52.7 28.1 21.1 21.0 14.8 10.0 8.6 6.2 5.1 3.9 7.4

60 and above 1136 49.0 29.0 20.3 21.5 15.1 8.3 9.8 4.1 4.7 2.3 6.3

Figure 6-17 Topic of conversation regarding life insurance with someone close (by gender, by age)

74

colleagues from work. It can be said that consumers are using WOM to make

sure the contents of assurance and insurance premium of the life insurance they

have are appropriate (not disadvantageous) compared to those who are close to

them (to resolve cognitive dissonance), or as an information source so that they

do not overlook advantageous products when considering getting coverage.

However, for such purposes, there are channels where people could obtain

more accurate and specialized information such as the sales agent or call center

of the company from which they took out insurance. It would seem that more

accurate information could be obtained by going to experts or official websites

as the source of information to learn about candidate companies or products

when considering taking out insurance. So why do consumers use WOM?

Studies on the effect of consumers’ WOM on purchasing activities have

been accumulated in various disciplines including social psychology and

consumer behavior research and the following points have been made in the

course of such efforts.

・ Consumers trust information obtained from WOM than that from

advertisements

・ Customers who are dissatisfied will generate WOM towards more people

than satisfied customers

From the examples of the previously mentioned focused group interview, we

can see that consumers use WOM because they have a close relationship with

the person disseminating the information and they can easily receive

information without consciously seeking for it and furthermore, because they

seem to have a sense of security and trust for the following reasons.

・ Because the person doesn’t belong to a particular company, the

information I’m given is not for the company, but for myself

・ Because we’re close, I don’t have to worry about being lied to

・ It’s fine to talk about personal information such as my family structure,

history of illness, or family history of cancer (or we already know about

these things about each other)

Then, what are the characteristics of the consumer who uses such WOM?

Looking at the abovementioned topics of conversation that were held with

someone close, focusing on only those of policyholders, by the level of their

knowledge on life insurance, we can see that in general, the less knowledge

people have, the more diverse their topics of conversation are. [Figure 6-18]

The difference by the level of knowledge was particularly significant for

“details of coverage,” “details of benefits,” and the “company/product I

wouldn’t mind taking out” and it seems that relatively speaking, the less

knowledge consumers have, the more they tend to seek information on life

insurance from people close to them.

75

3-3. The status of WOM dissemination and the characteristics of those

who spread the word So what kind of consumers are spreading WOM and how much? Asked if

people had experience of spreading WOM, namely the experience of telling

others rumors or someone else’s experience they heard from a close person,

15% replied positively overall indicating that the number of people who spread

WOM accounts for less than 20%. [Figure 6-19] By gender, females scored

higher at 17% than males (13%), and by age group, those in their 30s to 50s

scored high at 17%. Furthermore, by whether or not the person has life

insurance, policyholders scored higher at 18% than non-policy holders (6%),

and among policyholders, by the level of satisfaction with the life insurance

they took out most recently, those who were satisfied scored 20% while those

who were dissatisfied scored 26%, both higher than the score for all

policyholders but it can be seen that the dissatisfied group is disseminating

more information.

55.8

30.3

22.8

21.1

14.5

10.5

8.9

7.7

6.1

4.3

7.6

42.7

21.0

15.8

12.4

9.3

8.5

5.5

6.3

3.5

3.5

3.6

58.5

32.7

22.8

23.5

15.0

10.0

9.5

7.0

5.9

4.3

7.8

65.1

36.4

29.4

26.6

18.7

12.8

11.6

9.6

8.6

4.9

11.0

0 10 20 30 40 50 60 70

Would talk about

(total)

Details of coverage

Product/company

I wouldn't mind taking out

Details of benefit

Current events

About the sales agent

Reputation of the company

Advertisement/novelties

How to see/

read

Contact pointwhile considering

Other

Total(n = 4013)

Low level of knowledge(n = 1240)

Medium level of knowledge(n = 1437)

High level of knowledge (n = 1336)

%

Figure 6-18 Topic of conversation regarding life insurance with someone close (by level of knowledge)

76

Meanwhile, according to the results of a quantitative survey conducted in

February 2009 that asked people about their actions, namely recommending or

conversely speaking badly about a specific life insurance company or a

particular product they took out, the number of those who told others about the

advantages of the company or product, or made positive recommendations

(number of recommenders) was 1.45 on average. [Figure 6-20] By gender, the

average number for males was 1.52, higher than females (1.39) and by age

group, few in their 20s had experience spreading information, with the average

number of those who did at 0.93, or less than 1, whereas the number was high

at 1.75 for those in their 40s. Conversely, the number of those who spoke of

disadvantages, bad impressions, or recommended to change or terminate,

(number of non-recommenders) was 0.92 on average, which is lower than the

number of recommenders, yet the trend by gender and age group was the same.

Looking at this by the level of satisfaction, the number of recommenders of

those who were “satisfied” was 2.38 on average, while it was 1.35 for those

who were “rather satisfied” and we could see that the number was

exceptionally high for the “satisfied” group. [Figure 6-21] On the other hand,

although the number of samples was limited and it should be considered as a

reference value, the number of non-recommenders was 3.50 on average for

those that were “dissatisfied” while it was 1.39 for those that were “rather

dissatisfied” showing that the number was higher for the dissatisfied group.

Such wide differences between those who were “satisfied (dissatisfied)” and

“rather satisfied (rather dissatisfied)” in terms of the number of both recommenders and non-recommenders matches the relation between the level

of satisfaction and the intention to recommend that we saw in Section 1. It can

be said that gaining full satisfaction has a significant meaning for the action of

loyalty as well. Moreover, in order to prevent bad reputation and

recommendations to terminate, perhaps we can say that it is important to make

14.9

12.7

17.2

9.3

16.5

17.0

16.9

13.5

17.8

19.6

25.7

5.8

0 5 10 15 20 25 30

Total (n = 5309)

Male (n = 2686)

Female (n = 2623)

in their 20s (n = 840)

in their 30s (n = 1174)

in their 40s (n = 1091)

in their 50s (n = 1068)

60 and above (n = 1136)

policyholder (n = 4021)




%

by

gen

de

rb

y age

by

wh

eth

er o

r n

ot a

po

licyholde

r

by

lev

el o

f sa

tisfactio

n

Figure 6-19 Experience of spreading WOM regarding insurance

77

efforts to stop people from lapsing into the state of being “dissatisfied” at least

immediately before it happens.

4. How important is following up?

Unlike general products and services, life insurance is something that needs

to be held for a long time, as in years or decades, from the time it is taken out

until the benefits are paid or until the policy expires, and in order to get

existing policyholders to maintain their contracts, it has been said that an

appropriate follow-up service is important. There seems to be no room for

argument to this claim, and in fact, some companies seem to be shifting their

compensation structure to evaluate their sales agents not only based on the

1.45

1.52

1.39

0.93

1.50

1.75

1.53

1.52

0.92

1.06

0.81

0.53

0.77

1.43

1.23

0.60

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

Total (n = 1567)

Male (n = 680)

Female (n = 887)





60 and above (n = 247)

No. of recommender No. of non-recommender

People

Figure 6-20 Experience of recommending/not recommending the company/product I took out

1.45

2.38

1.35

0.940.52

1.000.92

1.030.83

0.96

1.39

3.50

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Total(n = 1567)

Satisfied(n = 290)

Rathersatisfied(n = 923)

Neither(n = 273)

Ratherdissatisfied

(n = 33)


No. of recommender

No. of non-recommender

People

Figure 6-21 Experience of recommending/not recommending the company/product I took out (by level of satisfaction)

78

number of new contracts obtained but on the follow-up activities they provide

to existing policyholders.

That said, how do the policyholders of life insurance actually recognize

these follow-up activities and what kind of activities would be effective to get

them want to maintain or renew their existing policy? In this section, we will

focus on the contents and effectiveness of follow-up activities towards

policyholders and attempt to reveal the significance of follow-up services and

what kind of services would be effective.

4-1. Situation with follow-up activities

First, asking the situation of services and information provided by the life

insurance company, its sales agents, or agency from which policyholders had

taken out their most recent life insurance, “consultation regarding life

insurance in general” scored the highest with 23% followed by “introduction of

new products and services” (22%) and “suggestions regarding reevaluation”

(20%) in that order. [Figure 6-22] Meanwhile, “not applicable, did not receive

any service” scored 42%, indicating that as many as 40% of policyholders are

not being followed up.

Looking at the situation by the major channels through which people took

out their policies, sales agents and agencies that are push strategy channels

scored higher for most items than other channels. Meanwhile, direct sales

channels scored low in general, as those who got insurance through postal mail

or the Internet scored high on “not applicable, did not receive any service” with 50% to 60% or more than half choosing this reply. As for insurance shops and

counters that are pull strategy channels, as are postal mail and the Internet, it

can be seen that there is a difference in the follow-up activities depending on

the channel from which people took out their insurance, with independent

22.8

22.0

19.8

18.7

13.4

7.0

5.3

4.6

4.3

3.9

3.4

3.2

0.4

42.4

0 10 20 30 40 50

Consultation regarding life insurance in general

Introduction of new products or services

Suggestions regarding reevaluation

Explanation on the situation of the existing contract

Explanation of various procedures

Introduction to medical/nursing information

Explanation on management situation

Introduction of discount privileges

Online services

Explanation of other life insurance companies/services

Consultation and suggestions regarding asset management in general

Loyalty programs

Other

Not applicable, did not receive any service

%

N=4021

Figure 6-22 Experience of services/information provided after taking out policy

79

insurance shops scoring higher in “consultation on life insurance in general” or

“explanation on other life insurance companies and services,” for example.

[Figure 6-23] Meanwhile, by the timing of when people took out their policy,

“not applicable, did not receive any service” accounts for approximately 40%

regardless of when the policy was taken out. Although no specific trend can be

seen from the contents of services or information provided, “consultation on

life insurance in general” scored high for those who took out their policies in or

after 2008 as did “suggestions regarding reevaluation” for people who took out

their policies in or before 2002. By the type of products people took out,

“consultation on life insurance in general” scored the highest with 29% for

death protection, followed by “introduction of new products/services” and

“suggestions regarding reevaluation” with about a quarter of respondents

choosing this reply. Whereas for individual annuity, “explanation on the

situation of existing policy” scored the highest at 24% and for medical/nursing,

“introduction of new products and services” accounted for the highest but

scored a mere 20%, implying that the follow-up service or information

provided differs between the type of product people took out.

Looking at the combination of service and information provided, among

policyholders who received some kind of service or information, the

combination of “introduction of new products or services” and “suggestions

regarding reevaluation” as well as “explanation on the situation of existing

policy” and “introduction of new products or services” scored the highest both

at 16%, followed by “consultation on life insurance in general” and

“introduction of new products or services” (15%), “consultation on life

insurance in general” and “suggestions regarding reevaluation” (14%) and

“explanation on the situation of existing policy” and “introduction of new

products or services” (13%) in that order. [Figure 6-24]

(%)

Ｎ

Consultati

on

regarding

l i fe

insurance

in genera l

Introducti

on of new

products

or services

Suggestio

ns

regarding

reevaluati

on

Explanatio

n on the

s i tuation

of the

exis ting

contract

Explanatio

n of

various

procedure

s

Introducti

on to

medica l/n

urs ing

informatio

n

Explanatio

n on

managem

ent

s i tuation

Introducti

on of

discount

privi leges

Onl ine

services

Explanation of

other l i fe

insurance

companies/se

rvices

Consultation

and

suggestions

regarding

asset

management

in genera l

Loyalty

programs

Other Not

appl icable

, did not

receive

any

service

4021 22.8 22.0 19.8 18.7 13.4 7.0 5.3 4.6 4.3 3.9 3.4 3.2 0.4 42.4

1932 33.8 28.6 27.0 22.5 15.6 9.0 6.1 6.7 4.7 4.4 3.8 5.0 0.5 30.7

420 21.7 18.1 16.9 16.0 12.9 6.7 5.7 2.6 3.6 7.1 2.9 1.7 0.0 43.6

dedicated s tores/counters 286 19.9 19.6 16.1 14.3 11.9 5.2 5.2 2.8 2.8 2.4 3.5 1.4 0.0 45.5

shared s tores 134 25.4 14.9 18.7 19.4 14.9 9.7 6.7 2.2 5.2 17.2 1.5 2.2 0.0 39.6

747 8.2 16.7 10.8 13.4 11.6 4.6 4.6 2.8 5.2 2.7 1.9 1.5 0.5 54.9

Postal 369 4.9 13.8 8.4 12.7 11.1 4.3 3.5 1.9 3.3 1.9 0.0 0.8 0.5 60.7

Internet 270 8.9 15.6 11.1 14.4 12.6 4.1 4.1 2.2 8.9 3.0 3.7 1.9 0.4 55.6

Cal l center 108 17.6 29.6 18.5 13.0 11.1 6.5 9.3 7.4 2.8 4.6 3.7 2.8 0.9 33.3

798 28.2 21.6 19.9 22.7 16.7 9.6 5.8 5.1 3.6 7.9 6.0 3.0 0.3 39.6

808 25.4 24.4 19.9 17.9 13.2 7.8 6.6 4.5 4.6 4.5 4.2 3.2 0.6 40.5

604 17.2 20.5 15.6 18.4 13.4 4.8 5.8 2.5 5.5 2.2 2.0 1.7 0.2 45.5

315 17.8 21.3 21.0 21.0 15.9 7.6 5.7 6.7 4.4 2.9 1.6 4.8 0.3 44.4

1145 23.1 23.9 23.6 18.3 12.2 6.4 5.0 5.1 4.4 2.3 2.7 3.7 0.6 38.8

1544 28.6 25.3 24.5 19.0 12.8 7.8 5.7 6.0 3.6 4.9 4.1 3.6 0.4 37.2

404 25.2 18.3 14.1 15.1 10.9 3.0 4.0 3.2 4.7 3.2 4.7 2.7 0.5 48.5

287 22.0 22.6 14.3 23.7 19.2 8.4 8.4 7.0 9.8 3.8 8.0 8.7 0.3 36.9

1765 17.5 19.8 18.1 18.6 13.7 7.1 4.7 3.2 3.7 3.2 1.7 2.0 0.5 46.2

Figure 6-23 Experience of services/information provided after taking out policy (by major channels/timing of taking out policy)

Total

Sa les agents/agencies

Insurance s tores/counters

Direct sa les channels

In or after 2011

2008–2010

2003–2007

1998–2002

in or before 1997

Death protection

Savings

Individual annuity

Medica l/nurs ing

80

4-2. Fruits of following up

Looking at policyholders’ satisfaction with or intention to renew their

contracts as a result of receiving such follow-up services, the level of

satisfaction according to the Top-2 Box was always higher compared to those

who replied “not applicable, did not receive any service” (54%) regardless of

the details of the follow-up people received, and the difference was particularly

wide with “explanation on other life insurances and services” at 80%, “online

services” and “explanation on the situation of existing policy” at 79%,

“explanation of various procedures,” “introduction to medical/nursing

information,” “explanation on management situation” and “introduction of

discount privileges” at 78% and “consultation and suggestions on asset

management in general” and “consultation on life insurance in general” at 77%.

[Figure 6-25] Looking only at those who were “satisfied,” those who received

“explanation on other life insurances and services” and “introduction to

medical/nursing information” scored high at over 20%. Similarly, in terms of

people’s intention to renew their policy, people were always more inclined to

renew their policies according to the Top-2 Box than those who replied “not

applicable, did not receive any service” (76%) regardless of the details of the

follow-up they received, and the difference was particularly wide with “online

services” and “explanation of various procedures” at 90%, “introduction to

medical/nursing information” and “explanation on the situation of existing

policy” at 89%, and “consultation and suggestions on asset management in

general” at 88%. Looking only at those who intended to “renew,” “explanation

of various procedures” and “introduction to medical/nursing information”

scored high at 44% respectively.

(%)

n = 2315 Consultati

on

regarding

l i fe

insurance

in genera l

Introducti

on of new

products

or

services

Suggestio

ns

regarding

reevaluati

on

Explanati

on on the

s i tuation

of the

exis ting

contract

Explanati

on of

various

procedure

s

Introducti

on to

medica l/n

urs ing

informati

on

Explanati

on on

managem

ent

s i tuation

Introducti

on of

discount

privi leges

Onl ine

services

Explanati

on of

other l i fe

insurance

companie

s/services

Consultation

and

suggestions

regarding

asset

management

in genera l

Loyalty

programs

Consultation regarding l i fe insurance in genera l 39.6 14.6 14.3 11.4 7.7 6.3 4.9 3.7 1.6 4.5 3.0 2.1

Introduction of new products or services 14.6 38.1 16.3 13.0 8.8 5.6 5.0 4.7 2.9 2.6 2.6 3.3

Suggestions regarding reevaluation 14.3 16.3 34.5 15.5 8.4 5.5 3.5 3.8 2.6 3.2 2.6 3.2

Explanation on the s i tuation of the exis ting contract 11.4 13.0 15.5 32.5 9.1 5.1 4.0 3.5 2.8 2.9 2.7 2.8

Explanation of various procedures 7.7 8.8 8.4 9.1 23.3 3.5 2.9 2.7 2.7 2.1 1.4 2.2

Introduction to medica l/nurs ing information 6.3 5.6 5.5 5.1 3.5 12.2 2.2 2.2 1.0 1.8 1.6 1.0

Explanation on management s i tuation 4.9 5.0 3.5 4.0 2.9 2.2 9.2 2.1 1.1 2.1 1.5 0.9

Introduction of discount privi leges 3.7 4.7 3.8 3.5 2.7 2.2 2.1 7.9 1.1 1.2 1.5 1.7

Onl ine services 1.6 2.9 2.6 2.8 2.7 1.0 1.1 1.1 7.4 0.3 0.4 1.9

Explanation of other l i fe insurance companies/services 4.5 2.6 3.2 2.9 2.1 1.8 2.1 1.2 0.3 6.8 1.0 0.5

Consultation and suggestions regarding asset management in genera l 3.0 2.6 2.6 2.7 1.4 1.6 1.5 1.5 0.4 1.0 5.9 0.8

Loyalty programs 2.1 3.3 3.2 2.8 2.2 1.0 0.9 1.7 1.9 0.5 0.8 5.5

Figure 6-24 Combination of experience of services/information provided after taking out policy

81

Looking at these results by the combination of services and information

provided with an execution rate of 5% or more seen in Figure 6-24, the level of

satisfaction according to the Top-2Box was the highest for the combination of

“consultation regarding life insurance in general” and “explanation of various

procedures” at 90% followed by “consultation regarding life insurance in

general” and “explanation on the situation of existing contract” (88%),

“explanation on the situation of existing contract” and “introduction to

medical/nursing information” (86%), “introduction of new products or services”

and “introduction to medical/nursing information,” as well as “suggestions

regarding reevaluation” and “introduction to medical/nursing information” (at

85% respectively). [Figure 6-26] Confining the results to only those who were

“satisfied,” “consultation regarding life insurance in general” and “explanation

of various procedures” scored the highest at 28%. As for the intention to renew,

the combination of “explanation on the situation of existing contract” and

“introduction to medical/nursing information” scored the highest at 93%

followed by “consultation regarding life insurance in general” and “explanation

of various procedures”, “introduction of new products or services,” and

“introduction to medical/nursing information” (both at 93%), “consultation

regarding life insurance in general” and “explanation on the situation of

existing contract” (92%), and “explanation on the situation of existing contract” and “explanation of various procedures” (92%) in that order. [Figure 6-27]

Confining the results to those who intended to “renew,” the same items scored

high despite minor changes in that order. Looking at the services and

information provided leading to both high satisfaction and intention to renew,

Intention to renew

35.3

40.2

39.3

35.7

41.8

43.8

43.8

42.0

39.7

42.7

40.8

41.9

35.9

38.9

31.4

45.1

45.3

46.7

48.0

46.9

45.8

45.2

42.9

44.0

46.8

45.9

45.6

47.7

33.3

44.4

80.4

85.5

86.0

83.7

88.7

89.6

89.0

84.9

83.7

89.5

86.6

87.5

83.6

72.2

75.8

0 20 40 60 80 100

Renew

Probablyrenew

%

12.1

18.1

14.7

12.4

15.3

19.1

20.8

19.3

16.3

14.6

22.3

18.4

14.1

22.2

9.7

51.6

58.6

58.4

60.0

63.3

59.2

57.2

58.5

61.4

64.3

58.0

58.8

57.0

27.8

44.0

63.7

76.7

73.2

72.4

78.6

78.3

78.1

77.8

77.7

78.9

80.3

77.2

71.1

50.0

53.7

0 20 40 60 80 100

Total (n = 4021)

Consultation regarding life

insurance in general (n = 916)Introduction of new products

or services (n = 883)Suggestions regardingreevaluation (n = 798)

Explanation on the situation ofthe existing contract (n = 752)

Explanation of variousprocedures (n = 539)

Introduction to medical/

nursing information (n = 283)Explanation on management

situation (n = 212)Introduction of discount

privileges (n = 184)

Online services (n = 171)

Explanation of other life insurancecompanies/services (n = 157)

Consultation and suggestions regardingasset management in general (n = 136)

Loyalty programs (n = 128)

Others (n = 18)

Not applicable, did not receive

any service (n = 1706)

Satisfied

Rathersatisfied

%

Level of satisfaction

Figure 6-25 Level of satisfaction and intention to renew (by the experience of services/information provided after taking out policy)

%

82

except for “introduction of new products or services,” items that scored high

were all information provided, notwithstanding the fact that they vary from the

contents of existing contracts and additional services to general information,

and it shall be noted that they are not direct solicitation such as “suggestions

regarding reevaluation.”

As has been seen, although following up is essential for improving the level

of satisfaction of policyholders and enhancing their intention to renew in order

to maintain policies, its effectiveness differs depending on its contents, and

moreover, the effectiveness of activities with high execution rate, such as

“introduction of new products or services” and “suggestions regarding

reevaluation,” is limited. This implies that such activities are seen by

policyholders as “merely sales pitches” and end up in making them turn away.

These results perhaps suggest that in order to maximize the effects of

follow-up activities, consideration needs to be given as to how easy it is for the

customers to receive the service and the establishment of a good relationship

that does not turn them away is important.

14.8

15.6

22.6

17.5

18.2

24.3

20.9

25.1

17.0

28.1

25.9

24.6

21.1

26.1

21.6

58.7

61.8

59.9

65.1

61.3

63.5

63.5

57.1

60.8

61.8

58.5

60.8

64.1

59.7

62.1

73.5

77.4

82.5

82.5

79.5

87.8

84.4

82.3

77.8

89.9

84.4

85.4

85.2

85.7

83.6

0 20 40 60 80 100

Suggestions regarding reevaluation/Introduction of new products or services (n = 378)

Suggestions regarding reevaluation/explanation on the situation of the existing contract (n = 359)

Consultation regarding life insurance in general/

Introduction of new products or services (n = 337)

Consultation on life insurance in general/Suggestions regarding reevaluation (n = 332)

Introduction of new products or services/

Explanation on the situation of the existing contract (n = 302)

Consultation on life insurance in general/Explanation on the situation of the existing contract (n = 263)

Explanation on the situation of the existing contract/Explanation of various procedures (n = 211)


Explanation of various procedures (n = 203)

Suggestions regarding reevaluation/Explanation of various procedures (n = 194)

Consultation regarding life insurance in general/

Explanation of various procedures (n = 178)

Consultation on life insurance in general/Introduction to medical and nursing information (n = 147)

Introduction of new product or services/Introduction to medical or nursing information (n = 130)

Suggestions regarding reevaluation/

Introduction to medical or nursing information (n = 128)

Explanation on the situation of the existing contract/Introduction to medical or nursing information (n = 119)


Explanation of management situation (n = 116)

Satisfied

Rather satisfied

%

Figure 6-26 Level of satisfaction (by the combination of services/information provided after taking out policy)

83

36.0

37.9

44.2

39.2

42.7

46.4

43.6

42.4

40.2

46.6

44.9

46.2

43.8

52.9

45.7

50.0

51.0

46.9

47.6

47.4

45.6

47.9

48.3

49.0

46.6

45.6

46.9

47.7

40.3

43.1

86.0

88.9

91.1

86.7

90.1

92.0

91.5

90.6

89.2

93.3

90.5

93.1

91.4

93.3

88.8

0 20 40 60 80 100

Suggestions regarding reevaluation/Introduction of new products or services (n = 378)

Suggestions regarding reevaluation/explanation on the situation of the existing contract (n = 359)

Consultation regarding life insurance in general/Introduction of new products or services (n = 337)

Consultation on life insurance in general/Suggestions regarding reevaluation (n = 332)

Introduction of new products or services/Explanation on the situation of the existing contract (n = 302)

Consultation on life insurance in general/Explanation on the situation of the existing contract (n = 263)

Explanation on the situation of the existing contract/Explanation of various procedures (n = 211)

Introduction of new products or services/Explanation of various procedures (n = 203)

Suggestions regarding reevaluation/Explanation of various procedures (n = 194)

Consultation regarding life insurance in general/Explanation of various procedures (n = 178)

Consultation on life insurance in general/Introduction to medical and nursing information (n = 147)

Introduction of new product or services/Introduction to medical or nursing information (n = 130)

Suggestions regarding reevaluation/Introduction to medical or nursing information (n = 128)

Explanation on the situation of the existing contract/Introduction to medical or nursing information (n = 119)

Introduction of new products or services/Explanation of management situation (n = 116)

Renew

Probablyrenew

%

Figure 6-27 Intention to renew (by the combination of services/information provided after taking out policy)

84

Part 2 Consumer Segment and Process of Considering Taking Out

Insurance

Chapter 1: Status of Having Life Insurance and Consumer

Heterogeneity

1. Changes in the consumers’ process of considering taking out insurance

In Part 1, we reviewed the consumers’ process of considering taking out life

insurance along the laws of AISCEAS, which explains the purchasing behavior

of consumers of recent years. The AISCEAS model outlines the purchasing

behavior of consumers, that they would immediately perform searches on a product or service that is recognized or once it has gained their attention, to

compare it with other products in the course of examining purchasing the

product, and once the purchase is made, that they would share information with

other consumers, and as it has been shown in previous chapters, it can be said

that in recent years, consumers are taking basically the same actions in the process of taking out life insurance as well. [Figure 1-1]

However, as it stands, not all consumers proactively collect information,

compare, and examine before taking out insurance as described in the law of AISCEAS. Furthermore, the action taken in each process differs according to

the type of life insurance the consumer is taking out or the channel they are in

contact with, and there is a point when even consumers who go through the

consideration process on their own initiative wish to rely on others, such as sales agents or agencies, during the stage of consideration. The level of

understanding of the product taken out, as well as how much consumers are

convinced by the insurance premium, differs according to whether the consumer proactively went through the process of considering taking out the

insurance or not and their satisfaction later on and the intention to renew are also affected by these factors; however, probably only very few consumers are

capable of completing the entire process from collecting all the information

and deepening their understanding of its contents to making the final decision

85

without the support of an expert. That said, looking at the execution rate of the four processes in the process of considering taking out insurance by the timing

of when policyholders took out their most recent coverage as shown here and

there in Part 1, for all processes, the more recent the timing of their getting

their policy, the higher the execution rate was in general, indicating that the number of consumers acting on their own initiative in considering taking out

life insurance is growing gradually. [Figure 1-2] This implies that there is a

possibility that there will be more consumers taking all the action described in

the law of AISCEAS going forward, and the traditional sales method in which

the seller takes the initiative may sooner or later become unsustainable as a business. In order to adapt to the changes in consumers, perhaps it is necessary

to gain a deep understanding of consumer action and the mindset behind the

action.

2. The consumer segment and action of considering taking out insurance

In order to provide the information that consumers need at the appropriate

time, according to their financial and insurance literacy, to win contracts while

fostering trust and to maintain and improve the relationship with clients, it

seems that, in addition to the process of considering taking out insurance that

we have already reviewed, it is also essential to classify consumers into

segments from various perspectives and to deepen our understanding of their

mindset and behavioral characteristics. In Part 2, we will classify consumers

into different segments from these perspectives according to several factors

and review the characteristics of the consumers’ mindset and actions in the

distinctive segments.

First, in the following sections, we will focus on the differences that have

40.3

32.8

39.742.9

44.6

52.1

29.3

21.9

30.5

36.332.5

37.7

22.7

13.6

19.4

26.0 28.3

33.8

19.8

10.4

15.2

21.9

27.1

31.1

0

10

20

30

40

50

60

Total(N=4021)

in or before1997

(n=1145)

1998-2002(n=315)

2003-2007(n=604)

2008-2010(n=808)

in or after2011

(n=798)

Considered the necessity of having assurance

Reviewed the contents and/or costs of products

Searched for companies and/or products

Compared companies and/or products

%

Figure 1-2 Action taken when considering getting insurance (by the timing of purchase)

86

developed in the market that is seemingly saturated according to the

penetration rate for households considering the high penetration rate of life

insurance in Japan. Traditionally, the opportunity to receive financial and

economic education has been very limited for many consumers, and it is likely

that their financial and insurance literacy were developed based on the

accumulation of experiences gained through past transactions. This probably

means that consumers considering taking out insurance in such a high

household penetration rate environment have different histories of having

insurance, and they are probably undergoing different consideration processes

according to their history of coverage. Meanwhile, as for the consumers who

do not have life insurance in this high penetration rate market, who are the

minority but do exist, the reason why they do not have insurance and the

characteristics of their attribution seem to vary. These analyses shall help

deepen our understanding of the domestic life insurance market as a whole as

the first step in subdividing life insurance policyholders into categories and

revealing the differences in their consideration process.

In Chapter 2 that follows, we will review in detail the actions of the younger

generation, as well as those in their 30s and 40s in the stage of forming

families based on the segmentation according to the consumers’ demographic

attributions from the perspective that life insurance, in particular death benefits,

is a household asset in essence and closely related to the stages of life.

Together with the analyses made in the preceding chapter, perhaps revealing

the differences between the respective segments through analyses based on the

basic attributions from which it is easy to portray the image of the consumer

will provide valuable information in seeking clues for formulating

communication strategies or developing products.

Furthermore, in Chapter 3, we will focus on the gap among consumers in

terms of life insurance literacy. In Japan, efforts to improve financial literacy

have only just begun, and many consumers are making various decisions

without a sufficient level of literacy on life insurance as well. On the other

hand, with the expansion of the Internet environment, the cost of searching for

information has fallen dramatically for consumers; therefore, even if

consumers took the same action to search for information in the process of

considering taking out insurance, the contents they search for and their level of

understanding would most likely be different depending on their financial and

insurance literacy.

In Chapter 4, we will change the point of view and focus on the two needs of medical coverage and insurance for the aged, which are growing in light of the

aging society, to reveal the differences in the process of considering taking out

insurance by the types of product and also look into the reason why insurance

shops, which have rapidly increased their presence as channels, have become

more diverse in recent years and are popular among consumers. Reviewing the

87

differences between channels shall indicate where the expectations of

consumers towards the seller, for example the insurance company, lie.

3. The situation of life insurance ownership

According to the National Survey on Life Insurance by the Japan Institute of

Life Insurance (JILI) announced in September 2012, the household

participation rate of life insurance remained at a high level of 91%. [Figure

1-3] Meanwhile, in JILI’s Survey on Life Protection (2013), the participation

rate of individuals was 82% for males and 84% for females. [Figure 1-4] When

the life insurance market is saturated as seen above, most prospective clients

would probably already have some kind of insurance or another, and perhaps

the target must be set on additional purchases or conversions/switches. In this

section, we will review the situation of life insurance policyholders with

existing policies considering taking out insurance and the characteristics of

non-policyholders.

90.590.3

85.886.087.589.691.893.095.093.791.691.3

0

10

20

30

40

50

60

70

80

90

100

2012200920062003200019971994199119881985

Participation rate

Participation rate (conventional basis)

*Participation rate reflects the total of private insurance companies (including Japan Post Insurance), Postal life insurance, JA, Co-op, Zenrosai (National Federation of Workers and Consumers Insurance Co-operatives)

*Participation rate (conventional basis) reflects the total of private insurance companies (including Japan Post Insurance), Postal life insurance and JASource: Japan Institute of Life Insurance (Public Interest Incorporated Foundation) National Survey on Life Insurance (2012)

%

Figure 1-3 Changes in the household penetration rate

Figure 1-4 Changes in the life insurance participation rate

82.179.9

81.980.782.183.984.387.185.284.8 83.681.4

81.278.679.379.679.481.276.2

72.4

0

10

20

30

40

50

60

70

80

90

100

2013201020072004200119981996199319911990

Male

Female

*Survey in 2010 and later includes Japan Post Insurance in private insurance companiesSource: Japan Institute of Life Insurance(Public Interest Incorporated Foundation) Survey on Life Protection (2013)

%

Figure 1-4 Changes in the life insurance participation rate

88

3-1. The situation of people with coverage considering taking out

insurance

First, looking at the reasons why people took out the life insurance that they

got most recently, limiting the respondents to those who purchased their most

recent policy within five years from a quantitative survey conducted in March

2012, “net new” participant who did not have any other coverage accounted for

21% overall. [Figure 1-5] Among those who took out insurance when they had

an existing contract, “additional purchase” accounted for 29%, while

approximately half “converted” (21%) or “switched” (26%) indicating that

they cancelled all or part of their existing contract and streamlined the contents

of their coverage. By gender, males scored higher for “switched,” while

women scored higher for “additional purchase” compared to the overall figures.

Furthermore, by age, the younger group scored higher for “net new” with more

than half in their 20s and 30% in their 30s accounting for “net new.”

Looking at the reasons for considering taking out insurance when the

circumstances people have at the time of getting insurance are different as has

been seen, “life event” scored the highest at 58% or accounting for

approximately 60% for net new participants, while “solicitation” and

“reviewed life plan/family finances” scored high following “life event” for

those who “converted” or made an “additional purchase.” [Figure 1-6]

Moreover, for those who “switched,” “reviewed life plans/family finances”

(30%) and “life event” (28%) were comparable, indicating that the reason to

consider taking out insurance differs depending on the client’s circumstances at

the time of getting insurance. Furthermore, “commercials, direct mails” scored

over 20% among those who switched, making it characteristic that they took

action to review on their own initiative after seeing an advertisement or making

life plans.

20.8

19.6

22.0

56.9

30.2

12.4

4.3

7.0

20.9

23.7

18.1

10.2

15.3

27.2

29.4

21.2

26.0

29.8

22.0

10.6

27.2

26.9

31.1

29.7

28.6

22.8

34.5

16.9

24.9

29.7

31.7

37.8

3.7

4.1

3.3

5.5

2.3

3.7

3.4

4.4

0% 20% 40% 60% 80% 100%

Total (n = 1702)

Male (n = 858)

Female (n = 844)





60 and above (n = 344)

Net new Converted Switched Additional purchase Don't remember

Figure 1-5 Circumstances of taking out insurance

89

Meanwhile, looking into the actions taken when considering taking out

insurance, those who switched scored higher in terms of going through all the

actions, and we can see that they are particularly prudent in proceeding with

their examinations when getting insurance compared to net new participants, as

well as those who converted or made additional purchases. [Figure 1-7]

Looking at the source of information people used, overall, “comparison sites”

(26%), “sales agents” (25%), and “brochures requested” (20%) scored high in

that order, and by the circumstances of getting insurance, “opinions of family

member or friend” scored high among net new participants, while “sales agents”

scored high among those who converted. [Figure 1-8] Meanwhile, “FP” scored

higher for those who switched, and “the websites of insurance companies”

scored higher for those who made an additional purchase, respectively. As a

result, in terms of the channel through which people took out their insurance,

“sales agents” scored the highest for all groups; however, “direct sales channel”

also scored high with almost 30% of those who switched using this channel.

[Figure 1-9]

36.8

17.7

21.7

15.5

13.6

8.9

3.6

9.6

57.9

10.5

11.6

18.6

7.9

9.6

4.5

5.6

35.7

25.8

23.0

12.6

9.6

7.6

2.0

8.4

28.3

13.8

29.6

14.0

20.6

8.4

1.6

10.2

30.4

22.0

22.8

16.0

13.1

8.0

6.2

13.1

0 10 20 30 40 50 60 70

Life event

Solicitation

Reviewed life plan/family finances

WOM

Commercials,direct mail


Rise in income

Others

Total(n = 1702)

Purely new(n = 354)

Conversion(n = 356)

Switch(n = 442)

Additional purchase(n = 487)

%

Figure 1-6 Reason to start considering taking out insurance

47.5

37.2

30.2

29.2

47.2

37.0

31.1

24.9

45.5

33.4

26.4

21.1

58.1

41.9

34.8

39.4

41.5

37.8

30.0

31.2

0 10 20 30 40 50 60 70

Considered the assuranceI need

Considered the costs/contents of the product

Searched the companies/products

Compared and examinedthe companies/products

Total (n = 1702)

Net new (n = 354)

Converted (n = 356)

Switched (n = 442)

Additional purchase (n = 487)

%

Figure 1-7 Action taken when considering taking out insurance

90

As for the level of satisfaction, net new participants scored higher for

“services after taking out insurance,” however, scored around average for all

other items. [Figure 1-10] On the other hand, those who switched showed a

25.8

24.6

19.6

16.8

13.8

11.4

10.9

10.2

9.6

7.8

28.0

19.1

16.0

13.2

17.5

9.3

14.4

11.7

8.6

6.2

21.1

37.2

19.2

13.0

12.6

8.8

11.1

8.0

8.0

8.0

27.4

21.4

21.4

17.9

14.6

18.4

10.0

10.3

13.0

7.3

28.0

23.4

20.6

21.4

11.4

8.6

10.0

10.9

8.6

8.6

0 5 10 15 20 25 30 35 40

Comparison sites

Sales agents

Brochuresrequested

Insurance companies'

websites

Opinions of familymember or friend

FP

Money information

sites

WOM sites,text boards

Insurance agencies

Direct mails

Total (n = 1270)

Net new(n = 257)

Converted (n = 261)

Switched (n = 369)


%

Figure 1-8 Information source used

36.5

35.6

54.2

28.5

33.5

22.6

24.9

14.9

27.6

21.8

7.2

5.1

7.0

7.2

8.6

6.9

5.6

3.7

13.3

4.9

5.5

6.2

3.4

7.2

5.3

5.4

4.2

3.4

3.8

9.4

5.6

4.5

8.1

3.6

6.4

5.9

9.0

3.9

5.7

4.5

2.9

2.3

1.1

2.5

4.9

0 10 20 30 40 50 60 70 80 90 100

Total

(n = 1702)

Net new(n = 354)

Converted

(n = 356)

Switched(n = 442)

Additional purchase(n = 487)

Sales agent Direct sales channelInsurance agency FPInsurance Shops Banks, etc.Insurance companies counters Labor union/general affairs section at workOthers

%

Figure 1-9 Channel through which insurance was taken out

91

higher level of satisfaction compared to the overall figures for “contents of the

product,” “procedures for taking out insurance,” and “the life insurance

company.” These apparently reflect the dissatisfaction towards the previous

contracts and companies they had before making the switch and therefore

perhaps must be discounted somewhat; however, considering the possibility

that their high level of satisfaction towards their product and company may

lead to improved persistency rates, future additional purchases and referrals to

other clients, much attention should be paid to the risks of customer outflow to

other companies.

That said, in terms of their way of thinking towards life insurance, those

who switched scored high for “I’d like to take out insurance from different

companies for different purposes,” “I’ll thoroughly search for the least

expensive insurance,” and “I’ll compare the characteristics before taking out

insurance,” which indicates that they are quite demanding when it comes to the

acceptability of the product characteristics and insurance premium. [Figure

1-11] Meanwhile, as net new participants scored higher for “I'm concerned

about whether the product is what I expect it to be,” “I would take out

insurance after asking someone who is knowledgeable,” and “It's a hassle to

deal with more than one company,” if these people can be successfully

contacted at times of life events that encourage people to consider taking out insurance, perhaps it would be possible to have them convert or make

additional purchases in the future.

75.7

72.0

73.6

81.0

77.4

72.5

72.9

73.6

74.7

71.3

75.7

76.0

70.5

80.8

76.4

52.5

59.9

52.8

52.3

48.3

71.3

71.8

69.9

75.1

69.6

0 10 20 30 40 50 60 70 80 90

Total

(n = 1702)

Net new(n = 354)

Converted(n = 356)

Switched(n = 442)

Additionalpurchase(n = 487)

Contents of product Life insurance company Procedures to take out insuranceServices after taking out insurance Total level of satisfaction

%

Figure 1-10 Level of satisfaction

92

As we have seen, the reasons to take out life insurance, the action taken

when considering getting insurance, and the information sources used differ

significantly between new clients who have no experience taking out insurance

and those who become policyholders by converting or switching, and in particular, those who switched showed a higher level of satisfaction after

taking out the policy in general. Furthermore, the reasons to consider taking

out insurance were more proactive and their action of consideration has also

proven to be prudent. From the sellers’ point of view, those who switch might seem to be a difficult client at first because they take time to close their deals;

however, because they themselves are aware of the necessity of protection, it can be considered that the seller does not have to evoke the needs. From this

perspective, perhaps they are not difficult consumers at all. We can probably

say it is essential to aggressively create opportunities to squarely and carefully discuss the necessities of life insurance in order to build a relationship that lasts

long into the future.

66.3

56.8

46.8

46.4

43.5

39.6

30.3

30.1

22.8

22.4

21.9

21.4

20.3

17.0

16.3

69.2

51.4

55.4

54.0

46.9

42.9

40.1

37.0

24.6

20.1

25.4

21.5

25.1

20.9

24.9

55.9

48.3

47.5

42.4

36.5

36.2

28.4

28.7

23.0

23.3

23.3

23.3

21.3

16.6

16.9

71.9

61.3

47.5

47.3

50.7

43.0

29.2

29.6

21.9

19.9

21.0

20.4

18.8

14.0

13.3

67.6

65.5

39.2

44.1

41.3

37.4

26.5

27.5

23.2

27.1

19.3

22.0

18.3

18.5

12.7

0 20 40 60 80

Comparing characteristics

before taking out

Purchasing from differentcompanies for different purposes

Too much to deal

with several companies

Concerned if theproduct is as expected

Thorough search for

the cheapest insurance

Only minimumprotection is necessary

Care for reputation

Taking out after askingknowledgeable person

Care for new products

Having knowledge of insurance& financial terms in general

Taking out from

well-known companies

There're expertsin family or friends

Collecting information

constantly

Money is not a optionbut contents

Taking out bestselling

or popular products

Total (n = 1702)

Net new (n = 354)

Converted (n = 356)

Switched (n = 442)


%

Figure 1-11 Thinking towards life insurance

93

3-2. The situation with non-policyholders As stated above, the participation rate in life insurance is extremely high,

and the life insurance market is basically saturated. However, approximately

20% of both males and females, or 10% in terms of households, do not have

life insurance, meaning they do exist, and this implies that for insurance

companies, winning these people over is a crucial challenge. When we look at

individuals without insurance, although both males and females in their 20s

have outstandingly low participation rates, the participation rate is 80% to 90%

for those above 30. [Figure 1-12] Approximately 10% to 20% of people in their

30s and above do not have life insurance, and we can see that not everybody

gets insurance because they reach a certain age.

The sales of life insurance products have traditionally been considered as the

act of arousing the necessity and stimulating the needs for assurance so that it

leads to participation. However, as we have gone through in Section 1, there

are a certain number of policyholders who realized the necessity themselves

and took out insurance, and in recent years, the number of those who

proactively considered and took out insurance is growing. Then, could it be

that those without insurance never noticed the necessity of life insurance

themselves or their needs were never aroused?

The past experience of non-policyholders can be outlined into the three

categories of (1) those who do not have insurance yet (non-policyholders who

have never had insurance or never considered insurance at all), (2) those who

only have experience in considering (people who have experience of

considering taking out insurance but have never taken out one), and (3) those

who had insurance in the past (people who did have insurance but have become

non-policyholders due to maturity or termination). [Figure 1-13] When we look

at the ratio among the total of non-policyholders, (1) those who do not have

insurance yet accounts for 52%, (2) those who only have experience of

82.1

52.9

84.4

89.0

88.2

85.3

83.6

57.3

79.7

91.5

89.2

85.7

0 20 40 60 80 100

Males (n = 1769)






Females (n = 2274)






Ma

lesFe

ma

les

%

Figure 1-12 Life insurance participation rate

94

considering accounts for 21%, and (3) those who had insurance in the past

accounts for 26%, implying that one out of four non-policyholders had

insurance in the past but are in the situation that they currently happen to not

have insurance. Furthermore, approximately 20% of non-policyholders have

considered but never pulled through to make the final decision to get insurance,

and it seems efforts to attract these dropouts, to not miss them, are also

important.

Looking at these past experiences by gender and age group, the higher the

age group, the ratio of those who had insurance in the past was higher for both

males and females, and for those over 40, the ratio is higher than those who

don’t have insurance yet for both genders. Moreover, the ratio of those who

only have experience of considering was high for those in their 30s accounting

for 30% to 40% for both males and females.

In a previously conducted focused group interview, some people mentioned

the reason why they became non-policyholders after having insurance in the

past.

Elderlies said the following:

・ The maturity value was only several months’ worth of my salary and I

felt it was ridiculous. (Male, 65)

・ I had cancer when I was 56 but the benefit was so small, I thought

“insurance is a waste.” (Female, 60)

・ The maturity value of my husband’s insurance was very small and I felt “you can’t expect much from insurance.” (Female, 68)

Meanwhile, the younger generation commented:

・ According to the estimate, it seems I have to pay more than I can receive

and I feel like I won’t be able to recover the cost. (Female, 31)

52.3

77.7

50.9

35.9

22.7

20.7

70.7

43.0

30.2

30.4

31.9

21.0

15.5

28.3

14.1

10.6

11.5

23.2

35.2

22.9

17.4

19.4

25.9

5.4

20.8

48.7

66.7

66.7

4.5

21.8

45.8

52.2

48.6

0.9

1.4

1.3

1.1

1.6

1.0

0% 20% 40% 60% 80% 100%

Total (n = 1288)

Males in their 20s (n = 296)




Males in their 60s and above (n = 87)

Females in their 20s (n = 246)




Females in their 60s and above (n = 72)

Non-policyholders Those who only have experience of considering Those who had insurance in the past No response

Figure 1-13 Situation of non-policyholders

95

・ They only recommend their own company’s insurance and they

recommend the product that benefits the insurance company. (Female,

33)

As can be seen, some people stopped at the stage prior to getting insurance

and some chose not to get insurance due to various reasons. Meanwhile, even

among elderlies, there seem to be people who have never had insurance

because they are confident about their health condition as seen below.

・ I’ve never had to see a doctor and I’ve always thought it’s more

economical not to have insurance. (Male, 62)

・ I’ve always been healthy and have never seen a doctor. (Female, 65)

On the other hand, there are young people who have surrendered their

insurance because of their own experience that caused them to have feelings of

distrust against sales agents.

・ I surrendered (the insurance) because I had a feeling of distrust. The

suggestions that were made were not for me but for improving the

agent’s own records and I felt I was only being told of the advantages

and never the risks. (Male, 31)

As has been seen, the reasons that lead to people not having insurance seem

to depend on their past experiences rather than their age or stage in life.

In fact, looking at the reasons for not having insurance, the top reason was “I

cannot afford the insurance premium” for all groups, namely those who do not

have insurance yet, those with only the experience of considering and those

who had insurance. [Figure 1-14] Meanwhile, the reasons that follow for those

who had insurance in the past were “Because the insurance premium is

expensive,” “I don’t know if it will be useful,” and “It seems to be okay

without insurance,” which represent doubts about the usefulness and insurance

premium, while the reasons for those who do not have insurance yet were “I

don’t know if it will be useful,” “it somehow seems like a hassle,” and “the

insurance premium is expensive” in that order, and the reasons for those who

only have experience of considering were “the insurance premium is

expensive,” “I don’t know if it will be useful,” and “it somehow seems like a

hassle” in that order, showing the notion to avoid considering, in addition to

their doubts about usefulness and the insurance premium. Comparing the level

of knowledge on life insurance of those who do not have insurance yet, those

who only have the experience of considering, and those who had insurance in

the past, all have a lower level of knowledge compared to policyholders, and in

particular, 50% of those who do not have insurance yet accounted for “low level of knowledge” indicating that their doubts about the usefulness and

notion to avoid considering stems from their lack of knowledge. [Figure 1-15]

96

Then, will these people never take out life insurance?

Looking at the intention of non-policyholders to get insurance going forward,

12% of those who do not have insurance yet say they have the intention while

the ratio was 43% for those who only have experience of considering and 33%

for those who had insurance in the past. [Figure 1-16] Furthermore, in the

focused group interview, some have said that they would consider getting

42.6

21.8

20.0

13.8

12.1

9.5

9.5

9.2

7.8

6.2

40.6

24.1

15.2

16.0

11.9

9.5

8.5

7.1

10.3

4.9

39.6

23.7

26.7

16.7

13.7

14.8

13.0

10.4

6.3

9.6

48.8

16.2

23.7

6.9

11.1

5.4

8.7

12.6

4.2

6.0

0 10 20 30 40 50 60

I cannot afford the insurance

premium

I don't know if it will beuseful

Because the insurancepremium is expensive

Because it somehow seems

like a hassle

I don't want to have

insurance with no refundpayment

I don't understand thescheme

I feel like I would lose out

It seems to be okay withoutinsurance

I don't need to get insurance

I don't want to be

persistently chased after

%

5.4

3.6

3.5

2.3

2.1

2.0

1.4

0.5

4.3

1.2

3.1

3.3

1.5

1.5

1.5

1.3

0.1

4.0

9.3

5.2

3.3

3.7

1.5

3.7

1.9

0.4

4.1

11.1

3.6

4.2

3.0

3.9

1.8

1.2

1.2

5.1

0 20 40 60

I cannot get insurancebecause of pre-existing

conditions

I'm worried that the

insurance money won'tbe paid

There is no insurancethat I wish for

The participation

period is too long

I had to cancel due to

some problems in thepast

I don't have highexpectations for follow-

up service

Because I have other

methods of protection

I cannot get insurancebecause of the age

restriction

Other

Total (n = 1288)


Those who only have experienceof considering (n = 270)

Those who had insurance in thepast (n = 334)

%

Figure 1-14 Reason for not having insurance

12.2

3.8

38.4

50.2

32.6

19.2

36.0

34.4

41.0

38.3

43.0

45.5

51.6

61.6

20.3

11.1

24.4

35.3

0.2

0.2

0.2

0.3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total(n = 5309)

Policyholder

(n = 4021)

Non-policyholder(n = 1288)

Those who don't haveinsurance yet (n = 673)

Those who only have experience

of considering (n = 270)

Those who had insurancein the past (n = 334)

Low level of knowledge Medium level of knowledge High level of knowledge Unclear

Figure 1-15 Knowledge of life insurance

97

insurance because of concerns about their health condition.

・ When I donated blood, I was told they cannot use my blood because the

test results showed some problematic figures related to my liver function

and I felt I’ve reached that kind of age. (Male, 31)

・ A friend who is a university student is in the hospital and I was told that I

should better get insurance while I’m healthy because once you’re in that

kind of situation, you can’t get medical insurance anymore. I drink quite

a lot so I’m worried about my liver. (Female, 31)

Furthermore, some people start considering getting insurance when someone

close becomes ill.

・ Recently, a colleague of mine was hospitalized for uterine fibroid and

hernia. (Female, 33)

・ A friend was hospitalized. (Female, 33)

On the other hand, among those who had insurance in the past, some

commented that although they want to get insurance, they cannot because of

health reasons.

・ The insurance I had matured and at my age, I basically cannot get

insurance at all. (Male, 68)

As we saw in Part 1, the major reasons for policyholders to begin

considering getting insurance were life events and reviewing of life plans and

family finances. Similarly for non-policyholders, it seems that their life events,

life plans, and experiences of people close to them seem to be factors that make

them conscious of having insurance. As mentioned above, even if

non-policyholders start thinking of taking out life insurance, there is a high

possibility that their low level of knowledge would make them hesitant about getting coverage. In fact, looking at the reasons for not having insurance of

those who do want to get coverage, “I don’t understand the scheme so well”

scored the highest at 40%, followed by “the insurance premium is expensive”

(27%), and “I don’t need to get insurance” (26%) in that order. [Figure 1-17]

Looking at the results by their past experience, more than half of those who

23.9

12.3

42.6

32.9

76.1

87.7

57.4

67.1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total

(n = 1288)

Those who don't have

insurance yet (n = 673)

Those who only have experienceof considering (n = 270)

Those who had insurancein the past (n = 334)

Wants to get insurance No intention of getting insurance

Figure 1-16 Intention of getting insurance going forward

98

“don’t understand the scheme so well” among those who only have experience

of considering and those had insurance in the past expressed their intention to

get insurance. Additionally, among those who only have experience of

considering, more than half of those who replied, “it seems to be okay without

insurance” and “it somehow seems like a hassle,” expressed their will to get

coverage.

Although it might seem like taking the long way around, providing

information on life insurance in an easy to understand way to have people gain

correct knowledge may perhaps be the fastest way to lead non-policyholders to

taking out life insurance.

23.9

39.8

27.2

26.0

25.7

24.2

23.8

21.8

21.8

13.9

13.5

12.3

18.8

12.7

24.6

12.1

10.2

9.1

8.3

12.5

7.0

4.3

42.6

67.5

38.9

47.1

46.7

51.1

30.8

53.6

29.7

28.6

28.1

32.9

55.6

36.7

7.1

35.6

39.1

40.0

16.7

35.1

10.3

24.1

0 20 40 60 80

Total

Don't understandthe scheme so well

Because the insurancepremium is expensive

I don't need to get insurance

Cannot afford the

insurance premium

Because it somehow

seems like a hassle

I don't want to be

persistently chased after

It seems to be okaywithout insurance

I don't want to have insurancewith no refund payment

I feel likeI would lose out

Because I don't know

if it will be useful

Total (n = 1288)

Those who don't have insurance yet(n = 673)

Those who only have experience ofconsidering (n = 270)

Those who had insurance in the past(n = 334)

%

Figure 1-17 Intention of getting insurance going forward (by the reason of not having insurance)

99

Chapter 2: Segmentation Based on Demographic Attribution

Life insurance, in particular death benefits, can be characterized mainly as

household assets and have a close relation to the different stages in life. In this

chapter, we will focus on the younger generation who are introductory users of

life insurance, as well as people in their 30s and 40s who are in the stage of

forming their family, and review in detail the coverage they have and their

awareness of life insurance.

1. Life insurance coverage held by the younger generation

As mentioned in the preceding chapter, the percentage of people with life

insurance among those in their 20s is 50% to 60% for both men and women,

which is significantly lower compared to those in their 30s and older. [Figure

2-1] Chronologically, while the ratio among both men and women in their 40s or older remained basically flat, the ratio among men in their 20s, which was

around 70% in the first half of the 1990s shows a declining trend from the late

1990s, and the most recent figures are approximately 15 points lower than the

figures in the first half of the 90s. Furthermore, the ratio among men in their

30s, which was over 90% in the 90s, and the ratio among women in their 20s, which was around 70%, have also declined gradually to 80% plus and less than

60%, respectively. From these results, it can be considered that in addition to

the decrease in the younger population due to the falling birthrate and the trend

to marry at a later stage in life, perhaps the fact that it has become difficult for sales agents to enter workplaces and the fact that the number of non-regular

employees whose income level is relatively lower than regular employees

(permanent employees) has risen, may be reasons why the percentage of those

with life insurance coverage among the younger generation is falling. In this

section, we will review the status of life insurance coverage among the younger generation, as well as their savings and investment behaviors, which are

background factors, and their awareness with the aim to gain some indications

to win over the younger generation.

Figure 2-1 Changes in the ratio of life insurance coverage

52.951.853.857.557.8

62.763.871.7

67.967.8

84.483.8

89.0

84.3

88.9

83.9

94.293.6

90.4

91.7

0

20

40

60

80

100

2013201020072004200119981996199319911990

% Male

57.353.2

60.056.5

61.458.966.1

72.168.5

63.3

79.780.6

82.582.2

79.977.3

82.882.4

75.2

75.9

0

20

40

60

80

100

2013201020072004200119981996199319911990

in their 20s in their 30sin their 40s in their 50sin their 60s

% Female

Source: prepared f rom the "National Surv ey on Lif e Security " by the Japan Institute of Lif e Insurance

100

1-1. The actual status of coverage among the younger generation To begin with, let us look at the ratio of non-regular employees among all

employees between 25 and 34 years old (excluding management executives)

according to the Labor Force Survey conducted by the Statistic Bureau of the

Ministry of Internal Affairs and Communications. We can see that the figures

have increased sharply between the late 1990s and around the year 2004 and

have remained above 10% among men and approximately 40% among women

in recent years. [Figure 2-2] Furthermore, also according to the National

Survey of Family Income and Expenditures conducted in 2009, the wage level

of male, non-regular employees younger than 30 years old is 217,000 yen for

part-time workers or approximately 40,000 yen less on a monthly basis than

the 253,000 yen of permanent employees. [Figure 2-3] Meanwhile, the wage

level of female workers was 246,000 yen, no different than permanent

employees at 245,000 yen. It can be considered that for men, whether one is

hired as a permanent employee or not significantly affects their level of

income.

Then what is the actual situation of coverage among non-regular employees?

Looking at the ratio of those with life insurance coverage according to our

10.711.7 12.0 11.9 12.8

14.415.8

19.5

23.725.8 25.0 25.6 26.0

27.7

3.6 3.2 3.1 3.04.2 5.1 5.7

9.111.3

14.1 13.2 13.315.7 16.6

25.9

28.2 28.4 27.4 27.229.4

32.0

34.8

41.4 42.0 41.3 41.639.5

41.9

0

5

10

15

20

25

30

35

40

45

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014

Total male and female

Male

Female

Source: prepared from the "Labor Force Survey," Statistics Bureau, MIC

%

Figure 2-2 Percentage of non-regular employees among all employees excluding managing executives (age 25-34)

252.9

245.4

217.1

246.2

190 200 210 220 230 240 250 260

Male

Female

Full-time staff/employees Part-time workers

Source: prepared from the "2009 National Survey of Family Income and Expenditure," Statistics Bureau, MIC

thousandyen

Figure 2-3 Monthly employment income of a single-worker household (younger than 30 years old)

101

quantitative survey, overall, the percentage of non-regular employees, such as

commissioned, temporary, and contract employees (non-regular) in the private

sector was 73%, which is approximately 9 points lower than permanent

employees in the private sector (82%). [Figure 2-4] By gender and age, for

men, the ratio of those with coverage among non-regular employees is

extremely low for those in their 20s at 22% compared to permanent employees

(49%). And although the percentage is higher for those in their 30s and 40s,

with 65% having coverage in their 30s (permanent employees: 80%) and 68%

having coverage in their 40s (permanent employees: 91%), the figures are

more than 10 points lower compared to permanent employees of the same age

group. The situation is similar for females where the percentage of those with

coverage rises with age for both permanent and non-regular employees, with

the ratio of women having coverage at 41% among those in their 20s

(permanent employees: 63%), at 69% among those in their 30s (permanent

employees: 82%) and at 75% for those in their 40s (permanent employees:

89%), however, there is always more than a 10-point difference between

permanent and non-regular employees regardless of the age. These results

perhaps imply the possibility that for males in particular, the gap in wage levels

as seen above might be affecting whether people have coverage.

Focusing on non-regular employees with coverage and looking at the types

of products purchased (policy held), overall, the ratio of those with “death

protection” was 62%, more than 10 points lower than permanent employees (76%), while that of “medical/nursing protection” was at a similar level at 76%

(permanent employees: 72%). [Figure 2-5] By gender and age, it can be seen

that the ratio of men with “death protection” is lower for non-regular

employees at 63% than permanent employees (81%) while the ratio of women

81.9

54.9

80.6

90.1

82.4

48.6

80.1

90.5

80.7

62.7

81.9

88.8

72.5

34.0

67.4

71.8

76.0

22.2

64.5

67.7

68.9

41.4

69.1

74.5

0 20 40 60 80 100

Total

in their 20s

in their 30s

in their 40s

Total male

in their 20s

in their 30s

in their 40s

Total female

in their 20s

in their 30s

in their 40s

Permanent employees/staff Commissioned/temporary/contract employees

To

tal m

ale

an

d

fem

ale

Ma

leF

em

ale

%

Figure 2-4 Percentage of those with life insurance coverage

102

with “annuity insurance” is 9 points lower for non-regular employees at 20%

compared to permanent employees (29%). Furthermore, for females in their

40s, the percentage of non-regular employees with “medical/nursing” was 77%

or more than 10 points higher than that of permanent employees (64%) while

the percentage of non-regular employees with “annuity insurance” was 20%,

which was significantly below that of permanent employees (37%).

Turning our eyes to the annual insurance premium paid, overall, non-regular

employees paid 167,000 yen, or approximately 50,000 yen less compared to

the 219,000 yen paid by permanent employees. [Figure 2-6] By gender and age,

there is not much difference other than the 100,000 yen difference for those in

their 30s for males (permanent employees: 194,000 yen/non-regular

employees: 94,000 yen) and the 72,000 yen difference for those in their 40s for

females (permanent employees 208,000 yen/non-regular employees 135,000

yen).

75.8

81.3

69.0

71.4

74.8

50.0

65.0

61.9

77.0

91.7

71.1

77.1

62.1

50.0

58.6

64.3

63.0

75.0

70.0

57.1

61.1

41.7

52.6

68.6

20.8

18.8

13.8

23.2

22.0

0.0

10.0

28.6

19.5

25.0

15.8

20.0

21.7

0.0

22.4

28.6

21.3

0.0

20.0

23.8

22.1

0.0

23.7

31.4

0 20 40 60 80 100

(N=240)

(n=16)

(n=58)

(n=56)

(n=127)

(n=4)

(n=20)

(n=21)

(n=113)

(n=12)

(n=38)

(n=35)

Annuity insurance Savings

%

Commissioned/temporary/contract employee

男女計

男性

女性

72.2

70.3

73.5

67.9

72.3

69.0

73.1

69.1

71.9

71.6

74.3

64.2

75.5

60.0

71.9

78.4

80.7

67.6

77.1

80.9

62.0

52.7

60.7

70.5

28.6

17.9

24.5

36.1

28.4

15.5

25.9

35.9

28.9

20.3

21.4

36.8

27.5

19.3

30.4

33.1

27.8

19.7

30.2

34.5

26.8

18.9

30.7

28.4

0 20 40 60 80 100

Total(n = 1365)


in their 30s

(n = 441)


Total male

(n = 981)


in their 30s

(n = 301)


Total female

(n = 384)


in their 30s(n=140)


Medical/nursing Death protection

%

Permanent employee/staff

To

tal m

ale

an

d fe

ma

leM

ale

Fe

ma

le

Figure 2-5 Coverage by type of insurance

103

The reason for such differences in the amount of insurance premiums paid

between permanent employees and non-regular employees is perhaps the

difference in the coverage of men in their 30s and women in their 40s, namely,

the percentage of those who have death protection for males and annuity

insurance or medical/nursing insurance for females.

One possible factor behind such differences between male permanent

employees and non-regular employees is the high percentage of those that are

unmarried among non-regular employees, especially among men. According to

the abovementioned survey as well, the percentage of those that were

unmarried was higher for non-regular employees compared to permanent

employees for men; the percentage of unmarried men in their 20s was 79%

among permanent employees compared to 94% among non-regular workers,

while the ratios were 40% of permanent employees and 77% of non-regular

workers for those in their 30s and 33% of permanent employees and 48% of

non-regular workers for those in their 40s, respectively, showing that even in

their 40s, among non-regular employees, approximately half were unmarried.

[Figure 2-7]

166.70

127.71

116.39

175.87

183.94

106.67

94.11

242.50

148.20

133.46

126.95

135.49

0 50 100 150 200 250 300

(N = 240)

(N = 16)

(N = 58)

(N = 56)

(N = 127)

(N = 4)

(N = 20)

(N = 21)

(N = 113)

(N = 12)

(N = 38)

(N = 35)

thousandyen

男女計

男性

女性

219.33

135.31

181.58

253.45

236.57

149.06

193.79

267.80

174.89

121.77

154.96

207.60

0 100 200 300

Total(N = 1365)




Total male

(n = 981)

in their 20s

(n = 71)



Total female(n = 384)



in their 40s

(n = 95)

thousandyen

To

tal m

ale

an

d fe

ma

leM

ale

Fe

ma

le

Permanent employee/staffCommissioned/temporary/contract

employee

Figure 2-6 Annual insurance premium paid

104

Also in a focused group interview with unmarried young men, many said

they would wait to have insurance or to examine the possibility of getting

coverage until they married.

・ I’m not interested at the moment. Life insurance is something to have in

case something happens to me, so I think it can wait until I’m married

(permanent employee, 27)

・ I would get coverage once I have a family. When I have someone to

provide protection for, in case something happens to me….is how I see it

(temporary worker, 30)

Moreover, we can see that “marriage” is a major factor in taking out

insurance from the comments made by young men who are married, as

follows.

・ I got insurance shortly before my marriage upon my parents’

recommendation. I think I wouldn’t have gotten coverage if my parents

hadn’t recommended it. (permanent employee, 31)

・ I got insurance upon the recommendation of a sales agent when I started

working at my company. Now that I think about it, I could have gotten it

only after I married. (permanent employee, 27)

For the younger generation, especially for men, the perception that life

insurance (death protection) is “something you get once you are married” is

deeply rooted and perhaps we can say that this conversely is leading to the

image that it is something you do not need to get or to examine the possibility

until you are married.

1-2. The savings/investment behaviors and awareness of the younger

generation

As has been seen, the status of life insurance coverage, as well as whether

36.1

81.1

44.1

26.6

30.0

78.8

39.6

22.3

51.5

83.9

53.8

40.2

43.5

89.4

60.5

46.2

38.3

94.4

77.4

48.4

48.8

86.2

50.9

44.7

0 20 40 60 80 100

Total

in their 20s

in their 30s

in their 40s

Total male

in their 20s

in their 30s

in their 40s

Total female

in their 20s

in their 30s

in their 40s

Permanent employee/staff Commissioned/temporary/contract employee

To

tal m

ale

a

nd

fem

ale

Ma

leF

em

ale

%

Figure 2-7 Ratio of unmarried

105

people are married, which is a background factor, differs among the younger

generation depending on their income and employment situation. Then what

kind of lifestyle do they have? How much are they inclined to save? What are

their savings/investment behaviors? What is the level of concern about their

lives?

According to a focused group interview with the younger generation, there

were those who were making an effort to save money with the expectation that

they would get married and have a family, or so that they can support

themselves without getting married as seen below.

・ “I’m worried about the future. I think, ‘What if I end up living alone?

What would I do?’ So I’m working hard to save money for the down

payment to buy an apartment.” (Female, 31)

・ “I’m not so worried. All I can do is to be prepared financially so I’m

having money deducted from my salary to save at least 1 million yen per

year.” (Male, 27)

On the other hand, there were those who were making it a priority to enrich

their current situation of living, as follows.

・ “I think saving for the future is important but I don’t have a family or

children to provide protection for yet. Now is the only time I can use my

time and money for myself.” (Female, 25)

・ “I’m worried about myself as I don’t think I can get married. I think I

don’t have to get married.” (Male, 29)

From the above, we can see that the younger generation cannot be

considered in just one big bundle. Going through these comments, it seems

there is a group that expects to get married and have a family in the future

which is the group with traditional family values so to say, and a group that

believes they won’t (or can’t) get married in the first place. Furthermore, even

within the respective groups, the people may be divided into those who are

making efforts to save for the future, and those who are prioritizing enriching

their current situation of their lives.

In order to seek the size and other characteristics of the respective groups,

we divided the younger generation, namely those aged 20 to 34 who took part

in a survey conducted by our company in 2007 into four segments depending

on whether they were inclined to save or if they wanted to prioritize the present,

and whether or not they had traditional family values. The results showed that

those inclined to save with non-traditional values (savings – non-traditional)

accounted for 57% or more than half. [Figure 2-8] Meanwhile, the combination of those inclined to save who had traditional values (savings – traditional)

accounted for 10%, while the combination of those prioritizing the present with

traditional values (present – traditional) accounted for 8% and the combination

of those prioritizing the present with non-traditional values (present –

non-traditional) accounted for 24%. Looking at these results by gender and age,

106

the ratio of the savings – non-traditional group was slightly higher than the

total among males between 30 and 34, as was the ratio of the present –

traditional group among females between 20 and 24, respectively.

Even though the younger generation is likely to have less experience dealing

with financial institutions and less knowledge about financial matters

compared to those in the middle- and old-aged groups, those falling under the

savings – non-traditional and present – traditional groups tended to utilize

more financial products than other segments, although not as much as the

middle- and old-aged groups. In particular, the male present – traditional group

also had a high level of financial knowledge. [Figure 2-9, Figure 2-10]

Meanwhile, looking at the savings/investment amounts as a percentage of

monthly income, among males, the savings – traditional group scored more

than 10% as did the savings – non-traditional group among females, implying

that groups proactive in asset building differs between genders. [Figure 2-11]

The reasons for working hard to build assets are also expected to be different,

such as “in preparation of starting a family in the future” or “in order to live on

one’s own.”

1.78

1.65

1.74

1.49

1.45

1.37

1.34

1.34

0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0

Savings―Non-traditional

Savings－Traditional

Present－Traditional

Present－Non-traditional

Male

Female

# of types

Figure 2-9 No. of types of financial products held

107

If we look at the concerns pertaining to living as a reason for taking out life

insurance, worries leading to preparing for death or old-age security, such as

“I'll die leaving my family behind,” “I'll burden my family with my nursing,”

and “My spouse will pass away leaving me behind” are strong among the

present – traditional group for both men and women. [Figure 2-12]

Furthermore, concerns leading to preparing for medical assurance such as

“getting cancer, heart disease, cerebrovascular disease,” “illness or injuries

requiring long-term hospitalization or hospital visits,” and “being left with

disorders (aftereffects) from illness or injuries” were high among the male

present – non-traditional group and female savings – non-traditional group [Figure 2-13] As for the present – traditional group, although they expect to get

married and have a family, when recommending products to them, perhaps it is

important that they do not feel the burden of the product would weigh on their

daily life, because they want to prioritize their current lives. Meanwhile, for

4.0

3.8

5.3

6.5

3.1

6.0

6.3

6.5

9.1

4.4

1.3

0.7

3.5

2.5

1.5

16.7

16.7

17.6

21.1

14.7

22.6

22.6

23.8

28.9

19.6

9.0

9.5

8.4

9.1

8.2

20.7

20.5

23.0

27.6

17.8

28.7

28.9

30.4

38.0

24.0

10.3

10.2

11.9

11.6

9.8

0 10 20 30 40 50

Total (N=3753)

Savings－Non-traditional (n=2148)

Savings－Traditional (n=357)

Present－Traditional (n=308)

Present－Non-traditional (n=892)

Total Male (n=2116)



Present－Traditional (n=187)

Present－Non-traditional (n=504)

Total Female (n=1637)




Savings－Non-traditional (n=388) Yes Rather Yes

To

tal m

ale

an

d

fem

ale

Ma

leF

em

ale

%

Figure 2-10 Have sufficient knowledge of the details of the financial product (interest/returns)

7.97

11.50

5.51

7.28

10.75

6.98

7.58

6.21

0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0

Savings－Non-traditional

Savings－Traditional

Present－Traditional

Present－Non-traditionalMale Female

%

Figure 2-11 Ratio of annual savings/investment amount as a percentage of one's annual income

108

both men and women of the present – non-traditional group, in addition to

concerns over risks they may face in a few years such as “higher housing

expenses,” “burden of repaying debt,” and “not being able to secure sufficient

educational expenses,” their financial fears for decades ahead including “facing

expensive medical/nursing care fees,” “higher burden of medical expenses”

and “not being able to secure sufficient living expenses for life after retirement”

were also stronger than the other groups. [Figure 2-14] That said, considering

that the group “may not get married” in the first place, they are merely feeling

like being crushed by the pressure of their vague sense of anxiety for the

uncertain future and they may only react to financial preparations “for

themselves in the present world” for the moment.

1.73

1.67

1.70

1.52

1.41

1.38

1.35

1.20

1.26

1.22

1.27

1.22

1.26

1.29

1.14

1.65

1.60

1.73

1.47

1.38

1.37

1.35

1.17

1.24

1.21

1.27

1.22

1.23

1.28

1.16

1.82

1.68

1.73

1.71

1.50

1.46

1.28

1.20

1.24

1.17

1.17

1.13

1.36

1.13

1.15

2.12

1.91

1.66

1.82

1.77

1.45

1.42

1.29

1.29

1.38

1.34

1.30

1.47

1.38

1.18

1.78

1.75

1.65

1.49

1.38

1.38

1.36

1.27

1.29

1.22

1.30

1.21

1.26

1.37

1.09

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Can't get married

Become lonely withoutgetting married

Nursing is a heavy burden andthis makes me feel depressed

I can't have children

It will be sad becauseI don't have children

I'll burden my familywith my nursing

My family won't be ableto live happily together

I'll die leavingmy family behind

My relationship with my parents/siblings will become bad

My family will not nurse me

I failed to teach and educatemy children/grandchildren

Marital relationship getting bad

My spouse will passaway leaving me behind

Raising a child is a heavy burdenand this makes me feel depressed

I can't move to a new spaceor renovate to prepare for when

I become old aged move out

Total female

(n = 1637)

Savings - non-traditional

(n = 962)

Savings - traditional

(n = 143)

Present - traditional

(n = 121)

Present - non-traditional

(n = 388)

1.70

1.60

1.37

1.35

1.21

1.23

1.19

1.15

1.07

1.07

0.98

1.02

1.00

0.93

1.03

1.68

1.56

1.37

1.34

1.21

1.21

1.21

1.16

1.10

1.06

0.97

1.01

0.98

0.92

1.04

1.83

1.74

1.41

1.41

1.31

1.26

1.19

1.18

1.08

1.05

1.02

1.15

1.12

0.99

1.00

1.61

1.55

1.25

1.36

1.26

1.24

1.18

1.13

1.08

1.12

1.05

1.05

1.05

1.08

1.03

1.74

1.68

1.42

1.35

1.15

1.28

1.16

1.17

1.02

1.11

0.97

1.01

0.98

0.89

1.03

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Can't get married

Become lonely withoutgetting married

Nursing is a heavy burden andthis makes me feel depressed

I can't have children

It will be sad becauseI don't have children

I'll burden my familywith my nursing

My family won't be ableto live happily together

I'll die leavingmy family behind

My relationship with my parents/siblings will become bad

My family will not nurse me

I failed to teach and educatemy children/grandchildren

Marital relationship getting bad

My spouse will passaway leaving me behind

Raising a child is a heavy burdenand this makes me feel depressed

I can't move to a new spaceor renovate to prepare for when

I become old aged move out

Total male

(n = 2116)


(n = 1186)

Savings - traditional

(n = 214)

Present - traditional

(n = 187)


(n = 504)

Figure 2-12 Worries concerning family relationships

*Value is the intensity of anxiety. It is the product of the subjective evaluation of the probability of occurrence (0-100%) and the everity level (1-4).

109

1.99

1.98

1.85

1.84

1.87

1.70

1.70

1.66

1.62

1.64

1.99

1.99

1.87

1.84

1.89

1.71

1.73

1.66

1.62

1.65

2.00

1.98

1.87

1.93

1.90

1.60

1.80

1.73

1.65

1.64

1.90

1.85

1.77

1.71

1.81

1.68

1.55

1.57

1.56

1.61

2.06

2.03

1.84

1.88

1.86

1.76

1.65

1.67

1.65

1.64

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Illness or injuries requiringlong-term hospitalization

or hospital visits

Ruining my mental health

Getting cancer,heart disease,

cerebrovascular disease

Being left withdisorders (aftereffects)

from illness, injuries

Not being able tomove freely

because of age

Getting life style diseasessuch as diabetes or high

blood pressure

Getting dementia

Not being able toreceive nursingservices I need

Not being able toreceive full-scalemedical service

Being in need ofnursing care and my

dignity being neglected



(n = 962)Savings - traditional(n = 143)

Present - traditional(n = 121)


(n = 388)

1.80

1.68

1.71

1.66

1.61

1.66

1.43

1.42

1.42

1.37

1.78

1.65

1.71

1.65

1.61

1.65

1.43

1.42

1.42

1.35

1.79

1.70

1.68

1.72

1.68

1.73

1.47

1.45

1.42

1.40

1.66

1.53

1.45

1.49

1.42

1.44

1.26

1.33

1.38

1.32

1.91

1.81

1.82

1.73

1.67

1.76

1.50

1.49

1.46

1.43

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Illness or injuries requiringlong-term hospitalization

or hospital visits

Ruining my mental health

Getting cancer,heart disease,

cerebrovascular disease

Being left withdisorders (aftereffects)

from illness, injuries

Not being able tomove freely

because of age

Getting life style diseasessuch as diabetes or high

blood pressure

Getting dementia

Not being able toreceive nursingservices I need

Not being able toreceive full-scalemedical service

Being in need ofnursing care and my

dignity being neglected

Total male(n = 2116)





(n = 504)

Figure 2-13 Worries concerning health/medical issues

2.27

2.27

2.16

2.08

2.10

2.08

1.93

1.60

1.59

1.26

2.28

2.26

2.17

2.10

2.10

2.09

1.88

1.58

1.55

1.27

2.22

2.26

2.22

2.08

2.16

2.09

1.99

1.66

1.63

1.23

2.11

2.08

2.07

2.00

2.08

1.91

1.99

1.62

1.73

1.26

2.32

2.37

2.19

2.06

2.11

2.12

2.03

1.67

1.66

1.24

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Income will decline orwon't grow so much

Higher burden ofmedical expenses

Not being able to securesufficient living expensesfor life after retirement

Less disposableincome

Facing expensive medical/nursing care fees

Prices will rise

Higher housingexpenses

Burden ofrepaying debt

Not being able tosecure sufficient

educational expenses

Failure to build my assetdue to changes in the

investment environment






(n = 388)

2.09

2.01

1.92

1.98

1.89

1.82

1.77

1.55

1.48

1.36

2.07

2.01

1.92

1.98

1.89

1.81

1.77

1.52

1.43

1.37

2.01

2.05

1.85

1.96

1.87

1.84

1.73

1.53

1.64

1.35

1.70

1.76

1.70

1.67

1.66

1.58

1.62

1.59

1.43

1.31

2.30

2.10

2.03

2.10

2.01

1.92

1.87

1.66

1.53

1.38

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Income will decline orwon't grow so much

Higher burden ofmedical expenses

Not being able to securesufficient living expensesfor life after retirement

Less disposableincome

Facing expensive medical/nursing care fees

Prices will rise

Higher housingexpenses

Burden ofrepaying debt

Not being able tosecure sufficient

educational expenses

Failure to build my assetdue to changes in the

investment environment

Total male(n = 2116)


(n = 1186)Savings -traditional

(n = 214)Present -traditional

(n = 187)Present - non-traditional

(n = 504)

Figure 2-14 Worries concerning family finances

110

As we have seen, the younger generation’s awareness of savings and starting

a family varies widely. Furthermore, their behaviors to build assets and the

concerns they have also differ depending on the respective groups. Perhaps,

with such diversity in mind, when approaching the younger generation, steady

efforts to gradually relieve their concerns that differ one by one may be

necessary.

2. Need for protection by the core target insurance group

In this section, we will focus on people in their 30s to 40s, or the so-called

core target insurance group, and review their family structures, the actual status

of their coverage, and their insurance needs going forward.

2-1. Family structure

First, as for whether the target persons are married or not, the ratio of those

that are unmarried differs widely depending on age; of those between the age

of 45 and 49, 25% of males and 16% of females were unmarried, while of

those between the age of 30 and 34, the ratio was 58% for males and 40% for

females. [Figure 2-15] Regarding the family who live together, of those aged

30 to 34 that are unmarried, 54% were living with their parents, while the

percentage of single households with no family living with them was 43% for

males and 40% for females. [Figure 2-16] Meanwhile, it can be seen that those

who were married are mostly so-called nuclear family households consisting of

a married couple and children, with the “spouse” scoring nearly 100% and

“children” approximately 70%, showing no differences by gender or age group

except for the percentage of “children” being slightly lower for females aged

30 to 34.

32.9

39.6

57.5

43.7

34.2

25.3

26.3

38.8

29.1

21.7

16.0

62.4

56.3

41.2

54.0

61.1

66.7

68.5

59.1

67.8

70.7

75.8

4.6

4.1

1.3

2.2

4.7

8.0

5.2

2.2

3.1

7.6

8.2

0% 20% 40% 60% 80% 100%

Total (N = 2265)

Total male (n = 1130)

age 30-34 (n = 226)

age 35-39 (n = 359)

age 40-44 (n = 257)

age 45-49 (n = 288)

Total female (n = 1135)

age 30-34 (n = 232)

age 35-39 (n = 357)

age 40-44 (n = 290)

age 45-49 (n = 256)

Unmarried Married Divorced/Widowed

Ma

leF

em

ale

Figure 2-15 Married or not

111

2-2. Life insurance coverage

The ratio of people with life insurance coverage among those aged 30-34

was 61% for males and 72% for females, which was lower than the other age

groups, and these figures rose with age. [Figure 2-17] Looking at the ratio by

areas of protection, “medical/nursing” scored high accounting for more than

50% except in the case of males aged 30 to 34, while the figures for “death

protection” among the same age group were low at approximately 40% for

both men and women. Furthermore, the ratio of those who had annuity

insurance increased with age for both men and women with males aged 45 to

49 scoring high at 36%.

54.4

54.5

51.5

58.0

54.5

52.1

54.4

57.8

56.7

55.6

39.0

5.2

5.6

10.0

5.7

7.8

15.8

15.0

20.8

12.7

14.8

9.6

17.1

22.2

13.5

19.0

12.2

7.8

41.7

43.1

46.2

40.1

40.9

46.6

39.6

34.4

40.4

36.5

53.7

0 20 40 60 80 100 120 140

Total unmarried (n = 746)


age 30 -34 (n = 130)

age 35-39 (n = 157)

age 40-44 (n = 88)

age 45-49 (n = 73)


age 30-34 (n = 90)

age 35-39 (n = 104)

age 40-44 (n = 63)

age 45-49 (n = 41)

Spouse Children Grandchildren

Unmarried sibling Married sibl ing Others

Ma

leF

em

ale

%

Figure 2-16 Family living together

97.2

96.7

96.8

96.4

97.5

96.4

97.7

97.1

98.3

97.1

97.9

70.8

73.6

71.0

71.6

75.8

75.0

68.5

60.6

72.7

69.3

68.0

11.0

12.4

8.6

8.2

11.5

19.3

9.9

13.9

6.6

11.7

9.3

0 50 100 150 200

Total married (n = 1414)


age 30-34 (n = 93)

age 35-39 (n = 194)

age 40-44 (n = 157)

age 45-49 (n = 192)


age 30-34 (n = 137)

age 35-39 (n = 242)

age 40-44 (n = 205)

age 45-49 (n = 194)

Parents (including in-laws) Grandparents

No family l iving together

%

*Values less than 5% is omitted from the charts.*Values less than 5% are omitted from the charts.

57.7

55.5

43.8

56.8

57.2

61.5

59.9

53.4

61.1

59.7

64.5

53.0

59.5

41.6

61.3

64.2

67.0

46.6

39.2

44.8

44.1

58.6

24.3

24.2

15.9

22.6

26.5

30.9

24.3

18.1

27.5

24.5

25.4

21.2

24.0

12.8

21.2

24.1

36.1

18.4

10.8

15.7

20.3

27.0

0 50 100 150 200

Medical/nursing Death Protection Savings Annuity insurance

%

79.0

79.0

60.6

80.5

83.7

87.5

79.0

71.6

78.7

80.7

84.4

0 25 50 75 100

Total (N = 2265)


age 30-34 (n = 226)

age 35-39 (n = 359)

age 40-44 (n = 257)

age 45-49 (n = 288)


age 30-34 (n = 232)

age 35-39 (n = 357)

age 40-44 (n = 290)

age 45-49 (n = 256)

Ma

leF

em

ale

%

Figure 2-17 Percentage of those with life insurance and types of products held

112

2-3. Background factors for protection needs Considering the sense of insecurity regarding people’s daily lives

8 that

serves as a reason for protection, “financial difficulties of life after retirement”

scored the highest among unmarried males, as did “personally becoming ill or

having an accident” and “Income flow stopped due to injury, etc.,” among

those that are married. [Figure 2-18] By age, unmarried males aged 30-34

scored lower for all items of concern, while the “financial difficulties of life

after retirement” scored higher as the age became higher. Separately, among

females, while the results for unmarried females were similar to that of men,

married females cited “Illness or accident of family member” the most,

followed by the “death of family member,” showing a different outcome from

men and unmarried women. [Figure 2-19] By age, the higher the age, the score

for “effects of aging” rose among those who were unmarried as did “financial

difficulties of life after retirement” and “nursing care for myself” for those who

were married.

8 The survey asked questions in a scale of 5. Figures are the results for the Top2Box.

71.9

68.2

73.6

69.3

66.0

64.9

70.1

73.6

60.7

63.5

72.0

64.5

74.2

65.6

64.5

64.5

68.8

77.4

60.2

61.3

71.6

66.5

74.2

69.1

67.0

67.5

69.6

71.6

57.7

63.4

74.5

71.3

75.8

72.0

68.8

64.3

72.6

77.7

63.7

66.2

69.8

69.3

70.8

69.3

63.5

63.0

69.3

70.3

61.5

62.5

0 30 60 90

Total married (n = 636) age 30-34 (n = 93)age 35-39 (n = 194) age 40-44 (n = 157)age 45-49 (n = 192)

%59.6

60.3

61.6

65.6

53.8

56.7

60.5

62.7

56.0

58.5

52.3

49.2

57.7

58.5

42.3

50.8

56.9

54.6

50.0

49.2

65.6

65.6

64.3

72.0

56.7

60.5

65.0

68.8

60.5

62.4

58.0

64.8

60.2

63.6

58.0

55.7

59.1

62.5

56.8

61.4

61.6

63.0

64.4

67.1

63.0

60.3

58.9

64.4

56.2

63.0

0 30 60 90

Illness or accident

of family member

Effects of aging

Myself falling ill

or having an accident

Financial difficultiesof life after retirement

Nursing care for myself

Death of family member

Income becoming unstable

Income flow stoppeddue to injury, etc.

Unemployment of myself

or my family member

Failure to build assets

Total unmarried (n = 448) age 30-34 (n = 130)age 35-39 (n = 157) age 40-44 (n = 88)age 45-49 (n = 73)

%

Figure 2-18 Insecurities about living (male)

113

2-4. Intention to get coverage going forward As for the intention to get coverage going forward by gender, age, and

whether or not the person is married, among men, those aged 45 to 49 of the

unmarried men and those aged 40-44 of the married men showed particularly

high interest, respectively, as did women aged 35 to 39, regardless of their

being married or not. [Figure 2-20]

Looking into the purpose of getting insurance cited by those who wish to get

coverage in the future by whether or not they are married, among unmarried

men, “death protection” scored the highest, particularly so for those aged 30 to

34. [Figure 2-21] Also among men, “medical protection” scored high among

unmarried men aged 45 to 49 as well as married men aged 35 to 44.

Meanwhile, among women, “medical protection” was the most popular

regardless of the respondent being married or not, although the difference is

particularly high for married women aged 40 to 44. By age, “death protection”

scored higher than “medical protection” among those aged 30 to 34 for both

married and unmarried respondents.

88.4

82.0

82.1

81.6

77.8

86.9

82.9

75.6

80.5

73.5

86.1

78.8

77.4

78.8

71.5

86.1

78.8

73.7

75.2

73.7

89.3

83.1

86.8

78.9

77.7

86.8

83.1

78.1

81.4

75.2

89.8

83.4

84.4

83.9

79.5

89.3

82.0

74.1

81.0

70.2

87.6

81.4

77.3

84.5

80.4

85.1

86.6

75.3

82.5

74.7

0 25 50 75 100

Total married (n = 778) age 30-34 (n = 137)age 35-39 (n = 242) age 40-44 (n = 205)age 45-49 (n = 194)

%76.5

79.2

76.5

83.2

72.5

71.8

79.5

81.9

72.5

70.8

73.3

75.6

73.3

81.1

66.7

71.1

81.1

84.4

72.2

78.9

76.9

79.8

77.9

83.7

74.0

76.9

78.8

82.7

73.1

67.3

87.3

81.0

82.5

90.5

76.2

76.2

82.5

82.5

76.2

69.8

65.9

82.9

70.7

75.6

75.6

53.7

73.2

73.2

65.9

63.4

0 25 50 75 100

Illness or accident

of family member

Effects of aging

Myself falling illor having an accident

Financial difficultiesof life after retirement

Nursing care for myself

Death of family member

Income becoming unstable

Income flow stopped

due to injury, etc.

Unemployment of myself

or my family member

Failure to build assets

Total unmarried (n = 298) age 30-34 (n = 90)age 35-39 (n = 104) age 40-44 (n = 63)age 45-49 (n = 41)

%

Figure 2-19 Insecurities about living (female)

114

31.0

28.5

29.3

31.8

38.4

33.2

32.3

33.0

36.3

31.3

32.6

32.2

39.4

25.4

26.8

32.9

34.3

37.2

32.2

27.3

69.0

71.5

70.7

68.2

61.6

66.8

67.7

67.0

63.7

68.8

67.4

67.8

60.6

74.6

73.2

67.1

65.7

62.8

67.8

72.7

0% 20% 40% 60% 80% 100%


age 30-34 (n = 130)

age 35-39 (n = 157)

age 40-44 (n = 88)

age 45-59 (n = 73)


age 30-34 (n = 93)

age 35-39 (n = 194)

age 40-44 (n = 157)

age 45-49 (n = 192)


age 30-34 (n = 90)

age 35-39 (n = 104)

age 40-44 (n = 63)

age 45-49 (n = 41)


age 30-34 (n = 137)

age 35-39 (n = 242)

age 40-44 (n = 205)

age 45-49 (n = 194)

Has intention to get coverage Does not have intention to get coverage

Ma

leF

em

ale

Un

ma

rried

Ma

rried

Un

ma

rried

Ma

rried

Figure 2-20 Intention to get insurance going forward

54.3

59.8

51.7

65.9

68.8

45.5

52.3

51.1

51.1

62.1

43.4

46.8

48.5

58.6

46.3

37.5

45.5

45.7

59.6

48.9

42.4

32.1

25.9

26.8

27.6

26.8

31.3

18.2

25.8

14.9

28.9

30.3

24.5

31.6

29.9

10.3

39.0

37.5

36.4

33.2

31.9

23.3

42.4

39.6

21.1

23.7

24.1

24.4

18.8

27.3

20.3

21.3

12.2

25.8

26.4

0 20 40 60 80

Total female

(n = 374)

(n = 97)

(n = 29)

(n = 41)

(n = 16)

(n = 11)

(n = 256)

(n = 47)

(n = 90)

(n = 66)

(n = 53)

%45.4

50.4

37.8

58.7

46.4

57.1

43.1

33.3

48.4

47.4

38.3

47.3

56.8

67.6

63.0

46.4

42.9

40.8

36.7

40.6

43.9

40.0

28.5

33.8

27.0

34.8

32.1

42.9

24.6

23.3

26.6

26.3

21.7

25.8

24.5

18.9

21.7

28.6

32.1

26.5

20.0

23.4

26.3

33.3

21.0

18.0

10.8

21.7

10.7

28.6

22.7

36.7

18.8

24.6

18.3

0 20 40 60 80

Total male(n = 372)

Total unmarried

(n = 139)

age 30-34(n = 37)

age 35-39(n = 46)

age 40-44(n = 28)

age 45-49(n = 28)

Total married

(n = 211)

age 30-34(n = 30)

age 35-39

(n = 64)

age 40-44(n = 57)

age 45-49(n = 60)

Medical Protection

Death Protection

Income Security

Old age security

Savings

Un

ma

rriedM

arrie

d

%

Figure 2-21 Purpose of getting coverage going forward

115

As can be seen, even among those in their 30s to 40s who are generally

considered as one big core target insurance group, there are significant

differences depending on their gender, age, and whether they are married, not

only in terms of whether they have life insurance, but also in terms of the types

of insurance they have and their insurance needs going forward. Moreover, as

for the information source they would consider using when examining the

possibility to get insurance in the future, “comparison sites” scored the highest

among both men and women, followed by “WOM/text board.” [Figure 2-22]

This is followed by “websites of insurance companies,” “financial information

sites,” and “TV commercial” in that order among men. Among females,

“brochures requested by oneself,” “financial planners,” and “opinion of family

member or friend” followed in that order. Note that sales channels, such as

“insurance shops,” “insurance agencies,” and “sales agents,” as well as “call

centers” were not among the top choices. This may imply that when people

examine the possibility of taking out insurance, they try to face sales agents

and agencies only after they arm themselves with theoretical backing by

obtaining information in advance from various information sources including

comparison sites.

In order to win over the core target insurance group, perhaps it can be said

that it is necessary to have a deep understanding of their individual needs and

be attentive as to what kind of information they have obtained and to how

much they understood the information.

35.0

23.5

20.2

20.1

19.4

19.4

18.9

16.8

16.5

11.4

36.3

22.0

16.7

21.2

19.9

20.7

15.3

11.3

13.2

14.2

33.7

24.9

23.8

19.0

19.0

18.2

22.5

22.2

19.8

8.6

0 5 10 15 20 25 30 35 40

Comparison site

WOM/text board

Brochures requestedby oneself

Insurance companies'website

TVCM

Financial informationsites

FP

Opinions of familymember or friend

Insurance shops

Sales agents

Total (N = 746)

Male (n = 372)

Female (n = 374)

%

Figure 2-22 Information source you would use when examining the possibility to take out insurance going forward (top 10 items)

116

3. Household Circumstances and Intention to Get Insurance

In the Opinion Survey on the General Public's Views and Behavior

conducted by the Bank of Japan, there has always been more consumers who

replied that their household circumstances have become worse off than those

who replied their circumstances have become better off and in approximately

half of the surveys conducted over the past ten years, more than 50% replied

their circumstances have become worse off. [Figure 2-23] Furthermore,

according to the Basic Survey on Wage Structure by the Ministry of Health,

Labour and Welfare, the wage of full-time employees have not grown for men

or women over the past ten years. On the contrary, men’s wages have

decreased 0.3% on average. [Figure 2-24] While there is no sign of

improvement in the environment surrounding our family finances as mentioned

above, how is life insurance perceived by consumers?

In this section, we will focus on consumers in a difficult economic

environment and endeavor to reveal the situation of their life insurance

coverage and needs going forward.

0

10

20

30

40

50

60

70

2004/3 2006/3 2007/12 2009/9 2011/6 2013/3

Better offWorse off

Source: prepared f rom the Opinion Surv ey on the General Public's Views and Behav ior conducted by the BOJ

%

Figure 2-23 Circumstances of life

-0.5

1.2

0.0-0.3

-0.9

-2.1

0.5

0.0

0.2

-0.9

0.6

-1.4

0.0

1.2

0.40.8

-0.2

1.9

0.5

-0.2

-3.0

-2.0

-1.0

0.0

1.0

2.0

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

MaleFemale

%

Source: prepared f rom the Basic Surv ey on Wage Structure by MHLW

Figure 2-24 Y-O-Y changes of scheduled wages

117

3-1. Household circumstances Looking at the consumers’ household circumstances

9, overall, “better off”

was 23% while “worse off” was 43% and more people replied that they were

worse off. [Figure 2-25] By gender, those who replied “worse off” accounted

for 46% of men. The figure was higher than that of females (39%). By age,

“worse off” scored more than 50% among those in their 40s, while those 60

and above scored low at 35%. The fact that there are differences in the level of

household circumstances depending on the gender and age group may well be

because during the period when it is difficult to reduce spending, such as

children’s educational expenses, people seem to feel they are worse off, and

when they reach their post-retirement period, they have made progress in their

asset building and can feel they are better off.

Looking at the situation of life insurance coverage by the level of household

circumstances, the percentage of those who have life insurance among those

better off was 81%. Meanwhile, the figure was 70% for those who were worse

off, showing a more than 10-point difference. [Figure 2-26] Looking at the

types of products taken out among those who have coverage, “annuity

insurance” scored higher among those better off that include more elderly

people. Separately, as for the total annual insurance premium paid, the better

off group paid an average of 225,000 yen, which was approximately 48,000

yen higher than those worse off (177,500 yen). [Figure 2-27] As can be seen,

there are differences in life insurance coverage, as well as the types of product

taken out and the level of insurance premium paid, depending on the household

9 The answer to the question in the survey is given in a scale of five: “I am very well

off,” ”I am rather well off,” “cannot say,” “I am rather not well off,” or “I am not well of at all.” The results mentioned above as “better off” and “worse off” are the results for the Top/Bottom 2 boxes respectively.

23.4

21.2

25.7

24.8

21.5

20.0

22.5

28.7

33.8

32.5

35.2

32.0

34.3

29.5

36.7

36.1

42.6

46.1

39.0

43.1

44.1

50.4

40.4

35.2

0.2

0.2

0.1

0.1

0.1

0.1

0.5

0% 20% 40% 60% 80% 100%

Total (n = 5309)

Male (n = 2686)

Female (n = 2623)


in their 30s (n = 1174)

in their 40s (n = 1091)

in their 50s (n = 1068)

60 and above (n = 1136)

Better off Neither Worse off NA/DK

Figure 2-25 Level of circumstances of life

118

circumstances.

3-2. Segmentation by household circumstances and insurance coverage Then what kind of differences are there in terms of consumer needs

pertaining to life insurance according to the household circumstances and

coverage they already have?

Looking at the two factors in combination, by gender, more men replied

“worse off – insured” than the total, while more women replied “better off –

insured” compared to the overall figures. [Figure 2-28] Separately, by age,

“better off – not insured” scored the highest among those in their 20s at 35%,

while “worse off – insured” accounted for 41% or over 40% among those in

their 40s. Furthermore, among those in their 20s and 30s, there were relatively

many who replied “worse off – not insured.” The percentage was especially

high, exceeding the overall figure, at 30% among those in their 20s.

75.7

75.5

66.1

24.9

27.6

80.5

78.3

67.4

26.6

35.2

70.3

74.2

65.6

23.9

22.7

0 30 60 90

Ratio of those withlife insurance coverage

Medical/nursing

Death protection

Savings

Annuity insurance

Total (N = 5309)

Better off (n = 1244)

Worse off (n = 2261)

%

Co

vera

ge b

y pro

du

cttype

Figure 2-26 Life insurance coverage

390.5

444.7

372.1

448.7

394.5

349.6 351.4 346.9

2.8 5.2-14.6

6.7 2.5 5.4 13.3-5.4

196.6225.0

178.7

227.7198.5

177.5 182.3 170.7

-100

0

100

200

300

400

500

Total(N = 4021)

Better off(N = 1002)

Very well off(N = 62)

Rather welloff

(N = 940)

Neither(N = 1422)

Worse off(N = 1590)

Rather worseoff

(N = 911)

Very worseoff

(N = 679)

+1σ -1σ Avg.ThousandYen

Figure 2-27 Annual insurance premium paid

119

When the respective segments were asked of their intention to get insurance

going forward, 33% of those who were worse off – insured said they “intend to

take out insurance” while 78% of those better off – not insured replied “they

have no intention” to do so. [Figure 2-29] As for the purpose of getting

insurance among those who intend to get coverage, “medical protection” and

“death protection” scored high exceeding 70%, respectively, among those who

said they were worse off – uninsured. [Figure 2-30] Meanwhile, “death

protection” scored high at approximately 70% among those better off –

uninsured as well. On the other hand, “retirement security” and “care

protection” scored relatively high among those who were worse off –

uninsured. Moreover, “funeral preparation costs” scored higher among those

worse off than those better off, regardless of whether or not they have

insurance, implying that even if those worse off do have life insurance, the

amount of coverage is likely to be less than what they primarily believe is

necessary, compared to those better off.

45.7

42.3

49.1

22.3

44.7

43.1

54.6

58.0

11.6

11.5

11.7

34.5

11.1

6.4

4.6

6.8

29.9

32.0

27.9

13.2

29.6

40.9

34.5

28.0

12.6

14.1

11.2

29.9

14.6

9.5

5.9

7.2

0.2

0.2

0.1

0.1

0.1

0.1

0.5

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (N = 5309)

Male (n = 2686)

Female (n = 2623)


in their 30s (n = 1174)

in their 40s (n = 1091)

in their 50s (n = 1068)

60 and above (n = 1136)

Better off-Insured Better off-Not insured Worse off-InsuredWorse off-Not insured NA/DK

Figure 2-28 Segmentation by household circumstances and insurance coverage

28.0

26.7

21.9

33.1

25.8

72.0

73.3

78.1

66.9

74.2

0 30 60 90

Total (N = 5309)

Better off-Insured (N = 2424)

Better off-Not insured (N = 616)

Worse off-Insured (N = 1590)

Worse off-Not insured (N = 671)

Intend to purchase Not intend to purchase

%

Figure 2-29 Intention to get coverage going forward

120

As for people’s awareness of life insurance, in general, those with insurance

scored higher regardless of their household circumstances. In particular, a big

difference could be seen between those insured and uninsured for “want to

choose from which company to get insurance depending on the purpose” with

a gap of 18 points among those better off and a gap of 16 points among those

worse off. [Figure 2-31] Meanwhile, the worse off group scored higher for

“will seek thoroughly for the cheapest insurance” and “concerned if my

expectations will be met when I get insurance” regardless of whether they were

insured or not. Especially for “will seek thoroughly for the cheapest insurance,”

the difference between the worse off - uninsured group and the worse off –

insured group was an outstandingly high 12 points. From the above, we can see

that items showing a conservative attitude towards taking out insurance are

supported by the uninsured group, while items prioritizing contents rather than

price are supported by those with better off circumstances, respectively. We can

also see that the worse off group is forced to prioritize the insurance premium

when considering taking out insurance in the future due to the difficult

economic environment they face. On the other hand, those better off – insured

scored high for “Interested in new products,” “can basically understand all

financial and insurance terms I see and hear” and “if the contents are good, will

51.7

47.6

26.1

25.4

18.4

11.8

10.9

10.2

6.1

3.0

3.0

46.3

37.7

22.1

25.3

20.1

11.7

7.7

8.2

6.6

4.0

3.5

57.8

70.4

26.7

17.8

13.3

4.4

7.4

17.0

4.4

2.2

0.7

50.5

46.7

25.8

29.0

17.6

14.6

13.7

11.6

6.5

2.3

3.6

71.7

70.5

42.2

20.8

17.9

9.2

17.3

8.1

4.0

2.3

0.6

0 10 20 30 40 50 60 70 80

Medical Protection

Death Protection

Income Security

Retirement Security

Savings

Care Protection

Funeral Preparation Costs

Preparation Costs for

Education/Marriage

Tax Advantage

Measures forInheritance Cost

Other

Total(N = 1485)

Better off-Insured(n = 648)

Better off-Not insured(n = 135)

Worse off-Insured(n = 527)

Worse off-Not insured(n = 173)

%

Figure 2-30 Purpose of getting coverage going forward

121

get it even if it is expensive” indicating that the group with better off

circumstances continues their search for information in pursuit of coverage

with higher quality even after taking out insurance. As a result, their financial

and insurance literacy seems to also have improved.

3-3. Segment of household circumstances and level of satisfaction

Separately, when we asked people who have experience of receiving

insurance money or benefit in the past of how they used the insurance money

or benefit they received, “medical expenses,” “living expenses” and “savings

such as bank deposits” were the three major use of the fund among each group.

However, the order of popularity was different, with “living expenses”

56.4

47.5

43.3

40.8

39.6

35.4

26.8

26.7

18.4

17.9

16.5

16.3

16.3

13.5

13.1

58.7

47.4

48.4

40.1

36.8

38.1

25.5

27.4

19.7

19.0

20.1

17.3

18.8

13.6

15.8

49.2

43.2

30.0

36.4

32.0

26.3

26.5

28.1

14.1

12.3

10.1

12.0

11.7

12.0

10.7

57.3

48.8

46.4

43.6

45.1

36.1

28.1

25.3

19.1

19.5

15.2

17.7

15.9

13.8

11.5

52.2

49.2

30.1

41.1

44.4

32.9

28.6

26.4

16.1

15.1

12.4

13.6

12.1

14.3

9.7

0 10 20 30 40 50 60 70

Will take out upon

comparing characteristics

It's a hassle to deal withmore than one company

Want to choose which company to get

insurance from depending on the purpose

Concerned if my expectations willbe met when I get insurance

Will seek thoroughly for

the cheapest insurance

Will only get minimal coverage

Interested in the reputation

Will get insurance after asking

someone knowledgeable

Interested in the new products

Will get insurance if it's from

a well-known company

Can basically understand all financialand insurance terms I see and hear

Am always collecting information

There's an expert in my family/among my friends

Will get the best selling or

popular insurance product

If the contents are good,will get it even if it is expensive

Overall (N = 5309)

Better off - insured (n = 2424)

Better off - uninsured (n = 616)

Worse off - insured (n = 1590)

Worse off - uninsured (n = 671)

%

Figure 2-31 Awareness of life insurance

122

standing out in particular at 65% among the worse off – uninsured group.

[Figure 2-32] Meanwhile, “savings such as bank deposits” scored high among

the better off group, and “medical expenses” scored among the insured group

regardless of their household circumstances. These results show that how

people use their insurance money or benefits differs depending on whether or

not the person has insurance or the level of their household circumstances, and

it may be that facing tight economic situation is leading to people surrendering

their life insurance. Indeed, looking at the level of satisfaction of life insurance

people took out most recently among those insured, the level of satisfaction is

low for the worse off group that suggests that the deterioration of the economic

environment surrounding consumers may be leading to dissatisfaction of the

life insurance they have. [Figure 2-33] However, if we look further into these

results showing the level of satisfaction by the level of knowledge of life

insurance, while there is no difference in the ratio of “satisfied” between those

with different household circumstances regardless of the level of knowledge,

among those with low level of knowledge, the worse off group voiced more

“dissatisfaction” although only slightly. Meanwhile, there is no difference

among the groups with a medium level of knowledge and a high level of

knowledge between the worse off group and the better off group for their level

of dissatisfaction. In order to ensure that policyholders do not grow dissatisfied

with the product they have due to the changes in economic environment and

that they do not think of surrendering their policy without careful consideration,

it is probably necessary to have clients gain knowledge by providing sufficient

explanations to them.

35.1

33.4

32.9

12.9

7.4

6.6

4.9

3.5

2.3

34.8

26.3

39.1

14.6

8.4

6.5

4.1

3.0

2.4

13.2

36.3

38.5

1.1

11.0

6.6

6.6

5.5

1.1

39.7

39.8

24.2

13.2

6.0

7.0

5.8

3.9

2.2

23.2

64.5

18.8

1.4

3.6

5.8

6.5

5.1

1.4

0 10 20 30 40 50 60 70

Medical expenses

Living expenses

Savings such as

bank deposits

Premium of other

life insurance

Funds for travel/

leisure

Children's educationalexpenses

Funds to purchasedurable goods

Debt servicing cost

Others

Overall (N = 2479)

Better off - insured (n = 1401)

Better off - uninsured (n = 91)

Worse off - insured (n = 847)

Worse off - uninsured (n = 138)

%

Figure 2-32 Usage of insurance money/benefits

123

As we have seen above, the group with worse off household circumstances

tends to prefer lower prices because of economic constraints and there seem to

be more people among them who wish to examine the possibility of getting

insurance carefully before taking something out. Furthermore, the group with

worse off household circumstances had the tendency to use their insurance

money or benefit on medical expenses and living expenses, and those with low

level of knowledge also tended to grow dissatisfied with their life insurance

product.

As the number of non-regular employees and those with experience of

changing jobs are increasing and performance-based wage system is becoming

a standard among companies’ wage systems, it is difficult to foresee how the

client’s personal income situation would change at which timing. However,

perhaps it is necessary to always be mindful also of such economic situations

of the clients so that they do not grow dissatisfied unnecessarily or become

skeptical of the necessity of insurance.

63.7

66.0

60.2

38.5

39.3

37.7

66.2

66.7

65.5

84.5

85.3

83.0

29.4

28.5

30.9

50.3

51.1

49.4

27.4

27.8

26.8

12.2

12.3

12.0

6.5

5.2

8.5

10.8

9.1

12.7

5.8

5.1

7.0

3.1

2.2

5.0

0.4

0.4

0.4

0.3

0.4

0.2

0.5

0.3

0.7

0.1

0.2

0% 20% 40% 60% 80% 100%

Overall (N = 4021)


Worse off (n = 1590)

Total low level of knowledge (n = 1240)


Worse off (n = 573)

Medium level of knowledge (n = 1437)


Worse off (n = 574)



Worse off (n = 440)

Satisfied Neither Dissatisfied NA/DK

Low

K

no

wle

dge

Me

diu

m

Kn

ow

led

geH

igh

Kn

ow

led

ge

Figure 2-33 Level of satisfaction by level of knowledge/household circumstances

124

Chapter 3: Consumer Insurance Literacy and Actions to Examine the

Possibility of Getting Insurance

As has been mentioned here and there in Part 1 and in the previous chapters,

there are disparities in consumer knowledge of insurance and the examination

process, and the information sources people use when examining the

possibility of taking out insurance differ depending on the level of knowledge

of insurance. Therefore, it has been pointed out that it is necessary to

accommodate such differences. So what are the factors creating such

disparities in knowledge between consumers? And what kinds of differences

are these disparities in knowledge making in the overall process of

examination?

In this chapter, we will focus on consumer literacy of insurance and review

the factors leading to these disparities in insurance literacy, as well as the

differences the disparities in literacy are making in the examination process.

1. Formative Factors of Insurance Literacy

1-1. Basic knowledge of insurance We reviewed how correct or incorrect individuals’ understanding of basic

items was from a ten-item quiz10

on basic knowledge of life insurance in

which people were asked to choose which items were correct. [Figure 3-1]

According to the results, items with a high percentage of correct answers

overall were, “you cannot take out insurance over the Internet” scoring the

highest at 78%, followed by “with medical insurance and cancer insurance,

there are cases in which you cannot receive insurance money/benefits

depending on the type or degree of illness” (67%) and “you can receive

benefits from only one company even if you took out medical insurance from

multiple companies” (64%), up to which 60% of people answered correctly.

[Figure 3-2] Conversely, items with a low percentage of correct answers scored

even less than 30% with “term insurance provides maturity proceeds at the

time of expiration of the indemnity period” at 25% and “general medical

insurance does not provide coverage for illness specific to females” at 26%.

This means there are items of which more than 70% of consumers either have

an incorrect understanding or cannot tell right from wrong. Although those

who have insurance showed a somewhat higher percentage of correct answers

than the overall figures, which includes the results of non-policyholders, the situation was not so different for policyholders with the percentage of

questions answered correctly falling below 30% for the bottom 2 box,

10 In this survey, people were asked to choose one of the three options of “correct,”

“incorrect,” and “don’t know” for the ten items shown in Figure 3-1.

125

indicating that more than a few consumers are taking out insurance without

correctly understanding its contents or mechanism. Between genders, more

men answered correctly for “if you take out insurance with a foreign capital

insurance company and this company exits the Japanese market, all the

coverage that has been paid for will be lost” while women did so to “insurance

moneys or benefits can only be claimed by the beneficiary designated in the

policy,” “with medical insurance and cancer insurance, there are cases in which

you cannot receive insurance money/benefits depending on the type or degree

of illness,” and “you can receive benefits from only one company even if you

took out medical insurance from multiple companies.” [Figure 3-3]

Furthermore, by age group, we could see the tendency that the percentage of

correct answers would rise as the age group became higher, which was the case

for the seven items excluding “with medical insurance and cancer insurance,

there are cases in which you cannot receive insurance money/benefits

depending on the type or degree of illness,” “term insurance provides maturity

proceeds at the time of expiration of the indemnity period,” and “when you

take out cancer insurance, you cannot receive insurance money/benefits for the

first three months even if you are diagnosed with cancer.”

Figure 3-1 Quiz on life insurance

1. With medical insurance and cancer insurance, there are cases in which you cannot receive insurance

money/benefits depending on the type or degree of illness

2. When you take out cancer insurance, you cannot receive insurance money/benefits for the first three months

even if you are diagnosed with cancer

3. General medical insurance does not provide coverage for illness specific to females

4. Term insurance (insurance that stipulates the term of assurance, such as the indemnity period for X years or until

the age of Y) provides maturity proceeds at the time of expiration of the indemnity period

5. If you are hospitalized and receive benefits, your insurance premium is raised

6. Insurance moneys or benefits can only be claimed by the beneficiary designated in the policy

7. You cannot take out insurance over the Internet

8. If the life insurance company goes bankrupt, all the coverage that has been paid for will be lost

9. You can receive benefits from only one company even if you took out medical insurance from multiple companies

10. If you take out insurance with a foreign capital insurance company and this company exits the Japanese market,

all the coverage that has been paid for will be lost

126

78.3

67.2

63.6

55.8

52.6

48.9

34.2

32.0

26.2

25.1

83.2

72.0

70.7

61.9

61.2

54.4

36.7

34.7

29.1

27.9

63.1

52.2

41.4

36.5

25.6

31.8

26.3

23.8

16.9

16.3

0 10 20 30 40 50 60 70 80 90

You cannot take outinsurance over the Internet

With medical insurance and cancer insurance, there are

cases in which you cannot receive insurance money/benefits depending on the type or degree of illness

You can receive benefits from only one company even

if you took out medical insurance from multiple companies

If the life insurance company goes bankrupt,all the coverage that has been paid for will be lost

If you are hospitalized and receive benefits,your insurance premium is raised

If you take out insurance with a foreign capital insurancecompany and this company exits the Japanese market,

all the coverage that has been paid for will be lost

Insurance moneys or benefits can only be claimed

by the beneficiary designated in the policy

When you take out cancer insurance, you cannot receiveinsurance money/benefits for the first three months

even if you are diagnosed with cancer

General medical insurance does not providecoverage for illness specific to females

Term insurance provides maturity proceedsat the time of expiration of the indemnity period

Total (N = 5309)

Policyholder (n = 2686)


％

Figure 3-2 Quiz on life insurance (percentage of correct answers)

(%)

N

You

cannot

take out

insurance

over the

Internet

With

medica l

insurance

and

cancer

insurance

, there

are cases

in which

you

cannot

receive

insurance

money/be

nefi ts

dependin

g on the

type or

degree of

i l lness

You can

receive

benefi ts

from only

one

company

even i f

you took

out

medica l

insurance

from

multiple

companie

s

If the l i fe

insurance

company

goes

bankrupt,

a l l the

coverage

that has

been

paid for

wi l l be

lost

If you are

hospita l i z

ed and

receive

benefi ts ,

your

insurance

premium

is ra ised

If you

take out

insurance

with a

foreign

capita l

insurance

company

and this

company

exits the

Japanese

market,

a l l the

coverage

that has

been

paid for

wi l l be

lost

Insurance

moneys

or

benefi ts

can only

be

cla imed

by the

beneficia

ry

des ignate

d in the

pol icy

When you

take out

cancer

insurance

, you

cannot

receive

insurance

money/be

nefi ts for

the fi rs t

three

months

even i f

you are

diagnose

d with

cancer

General

medica l

insurance

does not

provide

coverage

for

i l lness

speci fic

to

females

Term

insurance

provides

maturi ty

proceeds

at the

time of

expiratio

n of the

indemnity

period

Total 5309 78.3 67.2 63.6 55.8 52.6 48.9 34.2 32.0 26.2 25.1

Male 840 75.4 64.4 60.7 57.3 50.1 52.2 30.0 30.8 22.7 24.9

Female 1174 81.3 70.1 66.5 54.2 55.1 45.5 38.4 33.4 29.7 25.2

in their 20s 1091 66.5 58.5 47.5 37.9 30.7 34.0 27.1 25.6 19.4 19.3

in their 30s 1068 76.6 68.7 59.5 53.4 43.6 46.3 34.6 34.0 22.6 23.6

in their 40s 1136 79.8 68.5 66.9 58.1 54.4 49.7 34.6 33.4 24.7 28.0

in their 50s 4021 84.8 69.5 69.9 61.0 63.0 54.6 37.3 33.6 30.6 27.9

Age 60 and above 1288 81.2 68.7 70.4 64.3 66.4 56.3 35.7 32.0 32.1 25.4

Figure 3-3　Quiz on life insurance (percentage of correct answers)

127

1-2. Formative factors of insurance literacy Looking at the ratio by points, counting each correct answer as one point for

the respective items, the overall average was merely 4.8 points out of 10 points

maximum, implying that only 40% of the contents were understood correctly.

[Figure 3-4] Looking at the distribution, while 61% scored 5 points or higher,

which is above average, approximately 10% scored zero and about a quarter

(22%) scored only less than half of the average (below 2 points) indicating that

consumers’ level of knowledge is variable. As for the average points, there was

no significant difference between genders, while by age group, those in their

20s scored low at 3.7 points and the age group above those in their 40s and

above scored high exceeding 5 points. [Figure 3-5]

Looking at the distribution of points shown in Figure 3-4 by whether or not

consumers were insured, among policyholders, those scoring 6 to 7 points

accounted for the most, with the average at 5.3 points. Meanwhile, those

scoring zero accounted for the most among non-policyholders who scored 3.3

points on average. As can be seen, there is a difference in the level of

knowledge depending on whether or not people have experience taking out life

6.5

1.9 1.9 2.4 2.7 2.2 2.4 2.5 1.3 0.4 0.1

5.8

2.4 3.35.3

7.010.3

13.7 13.7

9.4

4.20.7

12.3

4.35.2

7.7

9.7

12.6

16.1 16.2

10.7

4.6

0.8

0

2

4

6

8

10

12

14

16

18 Policyholder (n = 4021)Non-policyholder (n = 1288)

%

*Value is the % of the Total (N=5309)

Figure 3-4 Score distribution of the quiz

4.8

4.7

5.0

3.7

4.6

5.0

5.3

5.3

0 1 2 3 4 5 6

Total (N = 5309)

Male (N = 2686)

Female (N = 2623)

in their 20s (N = 840)

in their 30s (N = 1174)

in their 40s (N = 1091)

in their 50s (N = 1068)

Age 60 and above (N = 1136)

Points

Figure 3-5 Average score of the quiz

128

insurance. However, even among those with life insurance, the scores were

distributed widely between zero and 10 points with 10% scoring less than 2

points. Moreover, a little less than 10% of non-policyholders did score higher

than the average, indicating that the formative factors for insurance literacy are

not confined simply to whether the person has insurance or not.

In a focused group interview performed in the past as well, there were

comments as shown below, from which it can be assumed that there are

consumers who try to arm themselves with knowledge before facing the seller

in order to reduce the information asymmetry as much as possible.

・ It’s better to request information after obtaining a certain degree of

knowledge by looking into the costs at insurance companies’ websites or

the kind of riders available with which company, and what is the best

way for what than to do so without knowing anything. (Male, 37)

・ I thought I wanted to see for myself what’s out there for about a month

after I decided to switch. I contacted a sales agent upon checking out the

kind of background knowledge such as what kind of differences there are,

what kind of options there are, and if there was anything that suits my

situation. (Male, 51)

Then, what are the factors creating disparities in insurance literacy among

consumers?

Looking at the source of information in daily life by the level of

knowledge,11

overall, “TV programs” scored the highest at 81% followed by

“portal sites/news sites” (71%) and “general newspapers” (59%) up to which

more than half of the respondents were watching or reading. [Figure 3-6] By

level of knowledge, people with a high level of knowledge scored higher for

most items compared to those with a low level of knowledge. In particular, for

“general newspapers,” while those with a low level of knowledge scored 49%

or less than half, those with a high level of knowledge scored 72%, showing a

large discrepancy. In addition, those with a high level of knowledge scored

higher for “catalogues/brochures” (eleven-point difference), as well as for

“websites of individual companies,” “magazines” and “direct mails”

(eight-point difference respectively). Meanwhile, the only item for which those

with a low level of knowledge scored higher was “blogs/twitter” at 22% or a

six-point difference.12

11 Respondents classified according to the score distribution of the quiz with those

scoring 4 points or less as people with a low level of knowledge, those between 5-7 points as people with a medium level of knowledge, and those scoring 8 points or higher as people with a high level of knowledge.

12 The fact that “blogs/twitter” scored high among those with a low level of knowledge is likely because many of those who chose this item were those of the younger generation whose average score is low.

129

As has been seen, the source of information in daily life differs according to

the level of insurance literacy and those with a high level of knowledge access

different information sources on a regular basis with “general newspapers” as

their main source. Furthermore, as we have seen in the preceding chapter, the

percentage of those who would “constantly gather information” on a regular

basis was higher for policyholders than non-policyholders. The disparity in

insurance literacy seems to come from the differences in the media people

regularly come into contact with and the actual experience of examining the

possibility of taking out insurance.

Consumers with different levels of insurance literacy also show a difference

in their purchasing behaviors for items other than insurance. In fact, looking at

the execution rate of actions when examining the possibilities of taking out

insurance by the actions people take in making daily purchases, namely between “A: I am of the type who researches myself until convinced” and “B: I

am of the type who wants to receive explanations from someone

knowledgeable,” among those of the type A who research until they are

convinced, 42% said they “examine the necessity of assurance” whereas the

percentage was 35% for those of type B who wish to receive explanations by

81.1

71.0

59.4

28.5

26.7

26.1

24.7

22.3

21.0

19.2

19.0

18.8

18.7

17.5

14.4

77.8

68.5

49.2

26.5

24.1

23.7

21.4

19.7

17.7

15.1

21.6

14.7

16.8

14.8

16.4

82.9

72.3

63.7

30.4

28.3

26.2

26.0

23.9

23.2

21.3

18.0

20.1

20.4

18.5

13.4

84.2

73.2

72.0

27.9

28.8

31.9

29.0

24.3

23.1

23.3

15.6

25.3

18.4

21.2

12.5

0 20 40 60 80 100

TV programs

Portal sites/news sites

(General) newspapers

Friends/acquaintances

Family

Websites ofindividual companies

Magazines

Mail magazines

Store counters

Direct mails

Blogs/twitter

Catalogues/brochures

Radio program

Free papers

SNS

Total (N = 5309)

Group with low-level of knowledge (n = 2075)

Group with medium-level of knowledge (n = 2381)

Group with high-level of knowledge (n = 853)

%

Figure 3-6 The source of information in daily life (top 15 items)

130

someone knowledgeable, resulting in a seven-point difference. [Figure 3-7]

Similarly, for “searching the companies/products,” “examination of types and

cost of burden,” and “comparison of companies/products,” those of type A

scored ten to eleven points higher in terms of execution rate, indicating that the

tendencies seen in daily purchasing behaviors have an effect on consumers in

the examination stage of getting insurance.

Looking at the source of information used when examining the possibility of

taking out insurance by the tendencies seen in daily purchasing behaviors,

“sales agents” scored high for both types A and B. Among those of type A, this

was followed by “brochures requested by oneself” (18%) and “life insurance

comparison sites” (16%) in that order, while the “opinions of family members

or friends,” which was taken up by 17% of those of type B, scored merely 12%.

[Figure 3-8] Furthermore, those of type A scored higher for “insurance

companies’ websites” and “financial information sites” than those of type B.

The number of information sources that consumers falling under type A use is

high in general, and we can see that they often use information sources on the

Internet that the seller cannot control. This tendency becomes even stronger for

those who took out insurance within the past five years with consumers of type

A looking up “life insurance comparison sites” and “brochures requested by

oneself” after “sales agents” while consumers of type B were using “financial planners” and “opinions of family members or friends” after “sales agents.” As

can be seen, consumers who research on their own until they are convinced

tend to arm themselves with knowledge using mainly information sources on

the Internet and are perhaps coming to sales agents with an equal or even

higher level of knowledge.

40.3

41.6

48.2

38.4

34.8

34.5

36.5

29.3

31.4

33.6

30.4

20.3

21.2

13.5

22.7

24.5

29.2

22.3

14.9

15.1

13.5

19.8

21.8

25.5

20.1

11.2

11.7

8.3

0 10 20 30 40 50 60

Total(N = 4021)

A(n = 3241)

Close to A

(n = 1038)

A little close to A(n = 2203)

B

(n = 765)

A little close to B(n = 669)

Close to B(n = 96)

Examining necessity of assurance Types and cost examination

Companies/products search Companies/products comparison

%

Re

search

ing

un

til

con

vinced

Ha

ving so

meo

ne

kno

wled

geable explain

Figure 3-7 Actions taken when examining the possibility of taking out insurance (by the behaviors when making purchases of items other than insurance)

131

In fact, looking at the percentage of correct answers regarding the basic knowledge of life insurance by the tendencies in daily purchasing behaviors, consumers of type A who research until they are convinced scored higher than those of type B who wish to receive explanations from someone knowledgeable by eight points for “with medical insurance and cancer insurance, there are cases in which you cannot receive insurance money/benefits depending on the type or degree of illness,” seven points for “if the life insurance company goes bankrupt, all the coverage that has been paid for will be lost,” and six points for “if you take out insurance with a foreign capital insurance company and this company exits the Japanese market, all the coverage that has been paid for will be lost.” This indicates that consumers of type A have a high level of knowledge in general. [Figure 3-9]

生命保険の口コミサイト・掲示板

24.8

18.6

21.9

11.9

8.2

13.2

9.3

8.7

13.8

5.3

6.8

7.9

8.5

4.5

9.7

24.3

19.6

23.1

10.9

8.4

14.4

9.3

9.0

12.6

5.3

7.2

7.6

9.4

4.6

10.3

27.5

12.4

14.6

17.4

6.7

5.1

9.6

6.7

20.2

5.1

4.5

8.4

2.8

3.9

5.6

0 5 10 15 20 25 30

営業職員

自ら請求

した資料生命保険の

比較サイト家族、友

人等の話折込広告

やチラシ保険会社

のサイト

ＴＶＣＭ

ＤＭ

ＦＰ

勤務先の

配布・回覧保険に関

する書籍

保険代理店

マネー情

報サイト新聞・

雑誌広告生命保険の口コミ

サイト・掲示板

(N=1200)(n=1020)(n=178)

%27.4

17.4

15.0

12.5

10.2

10.0

9.6

9.1

8.6

7.6

6.9

6.8

6.6

6.1

6.1

27.4

18.1

16.2

11.6

10.0

11.2

9.6

9.1

8.1

8.0

7.2

6.7

7.5

6.2

6.6

27.0

13.9

9.0

16.5

10.7

3.4

9.5

9.0

11.4

5.6

5.1

7.3

2.2

5.1

3.4

0 5 10 15 20 25 30

Sales agent

Brochures requested

by oneself

Life insurancecomparison sites

Opinions of family

member or friends

Flyers and/or Adinserted in newspapers

Insurance companies'websites

TV commercials

Direct mail

FP

Material passed around/

distributed in the workplace

Books on insurance

Insurance agencies

Financial information

websites

Advertisement innewspaper/magazine

Text board/WOM

site on life insurance

Total (N = 2537)

A (n = 2117)

B (n = 411)

%

Total insured Became insured w ithin the past 5 years

Figure 3-8 Information source when examining the possibilities of getting insurance(by the type of purchasing behaviors for items other than insurance)

132

2. Insurance literacy and actions taken when examining the possibility of

taking out insurance

As stated above, the disparities in insurance literacy are considered to come

from the actual experiences of examining the possibility of taking out

insurance and the daily actions of media access. Then, in fact, how are these disparities in literacy affecting the actions consumers take when examining the

possibility to get insurance?

First of all, looking at the process up to getting the insurance, the group with

a low level of knowledge scored higher for “got insurance exactly as recommended” while the group with a high level of knowledge scored higher

for other proactive behaviors. [Figure 3-10] Furthermore, looking at the

information source used when examining the possibility to get insurance, the

group with a low level of knowledge who scored low used “sales agents” the

most, with 25% using this source, and this was followed by the “opinions of family members or friends” (15%). [Figure 3-11] Most of these people seem to

be making the decision to get insurance based on the explanation given by

sales agents and upon consulting the opinions of family members or friends.

Meanwhile, among the group with a high level of knowledge, although “sales agents” scored the highest at 25%, this was followed by “brochures requested

78.3

67.2

63.6

55.8

52.6

48.9

34.2

32.0

26.2

25.1

79.3

68.8

64.2

57.1

52.7

50.1

34.1

32.7

25.9

25.5

74.8

61.1

61.0

50.4

52.4

43.7

34.6

29.2

27.2

23.0

0 10 20 30 40 50 60 70 80 90

You cannot take out insurance over the Internet

With medical insurance and cancer insurance, thereare cases in which you cannot receive insurance money/

benefits depending on the type or degree of illness

You can receive benefits from only one company even

if you took out medical insurance from multiplecompanies

If the life insurance company goes bankrupt,all the coverage that has been paid for will be lost

If you are hospitalized and receive benefits,your insurance premium is raised

If you take out insurance with a foreign capital insurance

company and this company exits the Japanese market,all the coverage that has been paid for will be lost

Insurance moneys or benefits can only be claimedby the beneficiary designated in the policy

When you take out cancer insurance, you cannot receiveinsurance money/benefits for the first three months even

if you are diagnosed with cancer

General medical insurance does not provide

coverage for illness specific to females

Term insurance provides maturity proceedsat the time of expiration of the indemnity period

Total (N = 5309)

A (n = 4285)

B (n = 1004)

%

Figure 3-9 Quiz on life insurance (percentage of correct answers)

133

by oneself” (21%) and “life insurance comparison sites” (18%) scoring around 20%, and consumers of this group seem to be making their decisions to take

out insurance by obtaining information as to which insurance company or

product to get through these information sources. Many of these

knowledgeable customers are perhaps spending the time to examine in detail a variety of information in order to make a comprehensive decision on which

insurance company or product to get.

40.3

29.3

22.7

19.8

24.8

31.7

19.2

15.4

12.2

30.5

42.8

32.4

23.6

20.6

24.1

47.8

37.7

32.4

30.1

17.6

0 10 20 30 40 50 60

Examined the needfor insurance

Examined the contents ofproduct and cost burden

Searched the companies/

products

Compared and examined

the companies/products

Got insurance exactlyas recommended

Total(N = 4021)

Low level ofknowledge(N = 1256)

Medium level of

knowledge(N = 2003)

High level ofknowledge(N = 762)

%

Figure 3-10 Actions taken when examining the possibility of getting insurance

27.4

17.4

15.0

12.5

10.2

10.0

9.6

9.1

8.6

7.6

25.0

12.4

12.4

14.5

9.1

5.6

11.8

8.6

4.5

7.2

29.6

18.3

15.1

13.3

10.5

10.6

9.5

9.2

9.1

7.8

24.7

20.9

17.6

8.2

10.6

13.6

7.3

9.2

12.2

7.5

0 5 10 15 20 25 30 35

Sales agents


Life insurance comparison sites

Opinions of familymember or friends

Flyers and advertisementinserted in newspapers

Insurance companies'websites

TV commercials

Direct mail

FP

Material passed around/distributed in the workplace

Total (N = 2537)

Group with low-level ofknowledge (n = 628)Group with medium-level ofknowledge (n = 1334)Group with high-level ofknowledge (n = 575)

%

Figure 3-11 Information source used when examining the possibility of getting insurance (top 10 items)

134

In fact, looking at the items people understood when getting insurance,

although the group with a low level of knowledge scored lower for all items

compared to the groups with medium or high level of knowledge, the former

also scored high for “the assurance I need” at 41% and the difference with the

group with a high level of knowledge (57%) was approximately 16 points,

which is smaller than the differences for “the characteristics and mechanism of

the insurance” (group with a low level of knowledge: 28%, group with a high

level of knowledge: 51%) and “the insurance money/benefit payment

requirements” (group with a low level of knowledge: 23%, group with a high

level of knowledge: 45%). [Figure 3-12] This implies that there would be

differences between the group with a low level of knowledge and the group

with a high level of knowledge in the sense that the main concerns of the group

with a low level of knowledge are whether or not the suggested plan covers (or

would cover) their needs or whether the proposed insurance premium is within

the range they can (or may be able to) afford, while the group with a high level

of knowledge have questions the kinds of products that match their needs and

which companies are offering such products or whether the insurance money or

benefits will definitely be paid when needed.

49.3

41.4

36.3

13.8

11.9

11.5

10.6

10.5

7.9

6.8

41.3

27.6

22.5

8.0

7.6

5.5

6.8

5.5

3.5

3.2

51.4

46.2

41.6

15.4

13.0

12.1

11.5

12.3

8.8

7.1

56.8

51.2

45.1

19.2

16.1

19.8

14.4

14.3

12.6

11.8

0 10 20 30 40 50 60


The characteristics andmechanism of the insurance


Advantages and disadvantagescompared to other life insurance



The handling institution


The procedures of variousmeasures after taking out the policy

About cooling-off

About the cancel deduction

Total (N = 4021)

Group with low-level ofknowledge (n = 1256)

Group with medium-level ofknowledge (n = 2003)

Group with high-level ofknowledge (n = 762)

%

Figure 3-12 Items understood when taking out insurance (top 10 items recommended)

135

In short, the examination process up to making the decision to take out

insurance for the group with a low level of knowledge and the group with a

high level of knowledge can perhaps be outlined respectively as follows.

- Group with a low level of knowledge: What does the product offer?

Does it match my needs? Can I afford the insurance premium?

- Group with a high level of knowledge: What are my needs? What are

the conditions that match my needs (coverage details, level of insurance

premium)? Which are the optimal products or companies?

When outlined as above, it seems that whereas the idea of the group with a

low level of knowledge originates from “what the product offers” with the key

point being whether or not it covers “my own needs,” the idea of the group

with a high level of knowledge originates from “my needs” and the key point is

whether “what the product offers” is necessary and sufficient.

3. Insurance literacy and the channel of choice/level of satisfaction

Looking at the level of insurance literacy according to the channel from

which consumers took out their most recent insurance, the percentage of “high

level of knowledge” was the highest among those who went through insurance

shops accounting for 35% and low among those who went through sales agents

or over the counter at 17%, respectively. [Figure 3-13] Meanwhile, the

percentage of “low level of knowledge” was low among those who went

through insurance shops at 21% and high, above 30%, among those who went

through sales agents, counters, telephone, or postal mail, indicating the

tendency that the preferred channel characteristics differs depending on the

level of knowledge. In fact, looking at the reasons for selecting the channel

from which people got their most recent insurance, for sales agents, “I could

trust the attendant” ranked the highest regardless of the level of knowledge,

followed by “because it was a family member or a friend” for the groups with

low or medium level of knowledge and “the insurance company was

trustworthy” for the group with a high level of knowledge, respectively.

[Figure 3-14] For other channels, the respective top reasons listed describe the

characteristics of each channel, although, for insurance shops, the No. 2 and

No. 3 reasons for the groups with medium and high levels of knowledge were

“could get abundant information” and “because I could learn exactly what I

wanted to know,” which are related to the understanding of the contents of the

insurance. This may imply the possibility that even among channels that have people go through a person in order to take out insurance, the explanations

given by sales agents are not considered as sufficient to promote the correct

understanding by consumers compared to that given by insurance shops.

136

Looking at the Top 2 Box results in terms of level of satisfaction, in general,

the group with a higher level of knowledge tends to have a higher level of

satisfaction. However, as for those who got their coverage through insurance

31.2

32.6

30.6

29.6

20.6

24.4

27.2

49.8

50.6

52.5

48.8

44.8

54.4

50.7

19.0

16.8

16.9

21.6

34.5

21.1

22.1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (N = 4021)

Sales agents (n = 1932)

Over the counter (n = 255)

Telephone/postal mail (n = 477)

Independent insurance shops (n = 165)

Internet (n = 270)

Others (n = 768)

Low level of knowledge Medium level of knowledge High level of knowledge

Figure 3-13 Insurance literacy (by the channel used to take out the most recent insurance)

No.1 No.2 No.3

Total (N = 4021)The attendant was trustworthy

(20.4%)


(17.1%)

The insurance company was

trustworthy (13.2%)Sales agents Total

(n = 1932)


(32.9%)


member or a friend (19.4%)


trustworthy (17.1%)Group with low level of

knowledge (n = 630)


(30.3%)




trustworthy (14.3%)Group with medium level of

knowledge (n = 977)


(35.1%)




trustworthy (18.1%)Group with high level of

knowledge (n = 325)


(31.4%)


trustworthy (19.4%)Gave sincere advice (17.5%)

Over the counter Total

(n = 255)

Procedure could be done

nearby (35.3%)


trustworthy (19.2%)－

Group with low level of

knowledge (n = 78)


nearby (30.8%)


(23.1%)


trustworthy (14.1%)Group with medium level of

knowledge (n = 134)


nearby (39.6%)


trustworthy (20.1%)－

Group with high level of

knowledge (n = 43)


nearby (30.2%)


trustworthy (25.6%)


(18.6%)Tel/postal mail Total

(n = 477)


(36.9%)


(31.2%)

There was no need to make

visits (27.0%)Group with low level of

knowledge (n = 141)


(34.8%)


(29.1%)


visits (27.0%)Group with medium level of

knowledge (n = 233)


(40.3%)


(35.2%)


visits (28.3%)Group with high level of

knowledge (n = 103)


(32.0%)


(25.2%)


visits (24.3%)Insurance shops Total

(n = 165)

Could compare many

companies (35.2%)

Could get abundant

information (24.8%)


what I wanted to know (20.6%)Group with low level of

knowledge (n = 34)

Could compare many

companies (32.4%)


nearby (26.5%)

Could get abundant

information (17.6%)Group with medium level of

knowledge (n = 74)

Could compare many

companies (31.1%)

Could get abundant

information (28.4%)


what I wanted to know (23.0%)Group with high level of

knowledge (n = 57)

Could compare many

companies (42.1%)

Could get abundant

information (24.6%)


what I wanted to know (21.1%)

Internet Total (n = 270)Because it was convenient

(42.2%)


(39.6%)

There was no need to go

through a person (25.9%)Group with low level of

knowledge (n = 66)


(33.3%)


(31.8%)

Because I could choose by

myself (18.2%)Group with medium level of

knowledge (n = 147)


(50.3%)


(38.8%)


through a person (26.5%)Group with high level of

knowledge (n = 57)


(49.1%)


through a person (35.1%)


(33.3%)

Figure 3-14 Reason for selecting the channel from which to take out insurance

137

shops, the percentage of those who were satisfied was higher for the group with a medium level of knowledge (78%) than the group with a high level of

knowledge (74%) although the difference is slim. That said, if the focus is on

those who were satisfied, the group with a high level of knowledge scored 18%,

higher than the group with a medium level of knowledge (13%); however, this does not necessarily mean that the group with a high level of knowledge is

dissatisfied with the insurance shops. Meanwhile, the level of satisfaction with

sales agents and agencies were lower for all groups regardless of the level of

knowledge compared to other channels. [Figure 3-15]

Even if one has a high level of literacy, the person may lose sight of one’s

needs over the examination process. However, if one realizes that the coverage

is insufficient after he or she has purchased the policy, it is still possible to accommodate his or her needs by examining the possibility of getting

additional insurance for what is lacking. For the consumer, it is obvious which path is the more efficient way to get coverage. However, as shown in Section 1,

even among the group with high literacy, only a very few chose all the correct

answers in the quiz on the basics of insurance, and the asymmetry of information and knowledge between the seller and the buyer is still significant.

Leaving the lack of basic knowledge as it stands means there is a considerable

12.4

8.4

13.4

15.8

10.0

6.2

10.8

14.8

17.6

12.8

20.9

16.3

15.9

11.3

18.0

17.5

15.8

17.6

13.5

17.5

14.4

10.6

12.2

24.6

12.9

9.1

14.9

12.9

52.5

45.2

55.8

55.2

50.5

41.3

55.2

54.5

46.3

48.7

41.8

55.8

62.1

62.4

60.9

64.1

56.4

38.2

64.9

56.1

55.9

45.5

61.2

54.4

51.6

45.0

55.3

51.2

64.9

53.5

69.2

71.0

60.5

47.5

66.0

69.2

63.9

61.5

62.7

72.1

78.0

73.8

79.0

81.6

72.1

55.9

78.4

73.7

70.4

56.1

73.5

78.9

64.5

54.1

70.2

64.1

0 30 60 90

Total(N = 3867)

Low knowledge (n = 1158)

Medium knowledge (n = 1954)

High knowledge (n = 755)

Total Sales Agents (n = 1932)




Total Over the Counter (n = 255)




Total Telephone/Mail (n = 477)

Low knowledge(n = 141)



Total Insurance Shops (n = 165)




Total Internet (n = 270)




Total Other (n = 768)



High knowledge (n = 170)Satisfied

Rather Satisfied%

Figure 3-15 Level of satisfaction (by channel from which insurance was taken out/by insurance literacy)

138

possibility that it will lead to future confrontations. It is of course required to fulfill accountability in terms of compliance; however, the above analyses

show that getting the customers to understand their needs and how the product

matches their requirements by providing sufficient explanations will lead to a

higher level of satisfaction and the intention to renew their policy, which in turn results in business achievements, such as maintaining the customer base

and improving profitability. In order to gain the favor of consumers who

acknowledge their own needs and wish to proactively make examinations, it is

perhaps essential to provide accurate information while straightening out their

misunderstandings. That said those with a high level of knowledge who arm themselves with

knowledge and have high insurance literacy tend to have negative images13

of

sales agents, such as “they’re intrusive” or “they sell only products that would

benefit themselves,” or “they lose enthusiasm once you’ve taken out the policy.” [Figure 3-16] Although they also have positive images including “they know

about life insurance in detail” and “they explain to you in an easy to understand

way,” it should be noted that it will not be easy to gain their trust when they

have such strong negative images.

13 The survey asked about these items on a scale of six from “I totally agree” to “I totally

disagree” and “I can’t say.” The results shown in the figure are those of the Top 2 Box.

= L385-L383

49.3

41.8

40.8

35.5

33.1

28.6

16.3

16.2

6.6

40.9

35.0

34.5

28.8

26.0

23.0

14.3

14.3

8.5

51.6

43.9

42.5

39.7

37.6

32.0

18.3

18.2

6.1

57.1

47.2

46.9

35.6

32.8

29.1

14.2

14.2

4.7

0 10 20 30 40 50 60

They're intrusive


They sell only products

that would benefit themselves

They know about life insurance in detail


They explain to you in an

easy to understand way


You can trust them

You can trust them

and you can’t go wrong

Total (N = 4021)

Group with low level of knowledge (n = 1256)

Group with medium level of knowledge (n = 2003)

Group with high level of knowledge (n = 762)

%

Figure 3-16 Attitude towards sales agents

139

4. The Brand of the Life Insurance Company and Actions to Take Out

Insurance

As has been described in the preceding sections, consumers who have made

an effort to arm themselves with knowledge through experience and acquiring

knowledge seem to be selecting insurance that offers exactly the coverage they

need for a relatively reasonable insurance premium by requesting product

brochures from various companies and comparing estimates. Meanwhile, there

are still a considerable number of consumers who take out insurance based on

the brand image of the underwriter and not based on the price (insurance

premium) or the contents of the product as can be seen in comments, such as “I

searched around but they all seemed similar and I couldn’t tell the difference so

I thought I would be safe if I went with a major company” or “I looked things

up on the Internet but didn’t really understand so in the end, decided to take out

the insurance because it was the brand I’ve always liked” or “I made

comparisons but the contents and price weren’t all that different so I decided

on the company that gave a good impression.”

Life insurance is a product that is easy to copy due to its product

characteristics, and it is extremely difficult for consumers to technically

compare the differences between the respective products by themselves.

Meanwhile, as has been mentioned in the beginning of this chapter, in reality,

the number of consumers with literacy high enough to make a sound

comparison and form a decision is limited. As a result, even if the number of

consumers who try to compare by themselves increases, many of them may

end up deciding on the product to take out based on the corporate brand,

including the size of the company or how well its name is recognized or based

on their trust in the channel.

In this section, we will review how consumers feel about the brand image of

life insurance companies and how these brand images of life insurance

companies are affecting consumer actions to take out insurance.

4-1. Brand in marketing

In marketing theories, “brand” is outlined in the three functions of (1) the

function to guarantee, (2) the function to differentiate, and (3) the function to

evoke. [Figure 3-17] Among these, (1) the function to guarantee refers to the

fact that the quality of a product or service is clearly assured by the company

with the specific name or logo attached to the product or service while (2) the function to differentiate means the product or service is clearly distinguished

from similar products or services of other companies with the specific name or

logo being attached to the product or service.

140

However, for these functions to be exerted to their full extent, it is

considered necessary to have the high quality of the product or service

provided evoked in conjunction with the name or logo of the brand when

consumers see or hear a certain product category (brand retention) or

conversely, when consumers see or hear the brand name or logo, that a certain

product category or concept and favorable sentiment comes to mind (brand

association). This brand retention and brand association as a set are called (3)

the function to evoke.

In the case of a brand that highly exerts the function to evoke, the consumer

would think of the name or logo of the brand when they think about making a

purchase in a certain category. Furthermore, it has been established that

building a powerful brand in relation to consumers has significant meaning for

business because consumers would purchase a product even if it were more

expensive than other brands (price premium) or take it up for examination as a

major candidate and decide on buying it without comparing it with other

companies’ products or services (loyalty) if they had a favorable feeling

towards the brand. For life insurance companies, gaining a favorable image

among consumers may perhaps have a great influence in building a

relationship of trust for direct channels that face clients directly in the field.

4-2. The brand image of life insurance companies Looking at the reasons why people chose the life insurance company from

which they most recently took out insurance according to a quantitative survey,

“trustworthy” scored the highest at 35% overall, followed by “low insurance

premium” (20%) and “familiarity” (12%) in that order. [Figure 3-18] Among

the reasons, the first and second items of choice were relatively unchanged

regardless of when the policy was taken out; however, among policyholders

who got insurance in or after 2011, “attractive product/service” came in third

while “have dealt with the company in the past” came in sixth place and “well

known” ranked eleventh, indicating that companies are no longer being

selected by consumers simply because they are the current underwriter or

because they are well known. Moreover, as a reason of choice, “large company”

Figure 3-17 Function of brand in marketing

Gu a r a n te e

Differentiation

E v o c a t i o n

Brand Association

Brand Retention

Function of

Brand in Marketing

Source：Yukihiro Aoki, et al. "Product and Brand Strategy

(Contemporary Marketing Strategy 1" Yuhikaku, Publishing Co. Ltd. 2004)

141

has also been declining14

since 1998, and among those who took out their

insurance in or after 2008, less than 10% have cited this factor.

For consumers, to be able to rely on the life insurance company is absolutely

a minimum requirement to maintain a policy over a long period of time and to

ensure they receive benefits, and it is only natural that “trustworthy” ranked the

highest. Meanwhile, the fact that “low insurance premium” came in second

seems to imply that how to hold down insurance expenses seems to be a

priority than whether the quality of the life insurance products offered by the

companies is good or bad or how much the product matches the client’s needs.

This may indicate that most life insurance companies’ brands are not strong

enough as to make consumers feel a sense of loyalty and take on price

premiums.

That said, comparing the reasons for choosing a life insurance company

between consumers who compared multiple companies and consumers who

14 It seems that the fact that in 1997, a life insurance company that was considered to be

bankruptcy-proof along with banks under the convoy system failed for the first time after the Second World War and a total of seven companies went bankrupt by the year 2000 is one of the reasons.

8.8

8.2

7.2

6.5

5.6

5.3

4.8

12.7

12.8

8.8

13.7

7.3

2.6

5.3

9.0

11.4

8.2

7.5

5.3

3.8

5.7

7.8

9.1

8.1

7.1

5.1

4.3

6.3

7.9

7.0

8.3

6.3

6.7

7.9

3.8

7.3

4.2

5.3

2.3

5.2

8.6

3.4

0 10 20 30 40

Easy to consult

Matched my needsthe most

Healthymanagement

Attractive product/service

Sales agent was

attentive

Recommended by

employer

Brochures were easy

to understand Total (N = 4021)In or after 2011 (n = 798)2008 - 2010 (n = 808)2003 - 2007 (n = 604)1998 - 2002 (n = 315)In or before 1997 (n = 1145)

%34.5

20.0

12.0

10.8

10.0

9.8

9.7

9.3

33.7

25.4

11.5

8.8

9.0

10.2

7.5

12.0

33.9

22.9

12.1

10.0

7.9

9.4

8.8

13.4

36.4

27.2

12.4

14.2

9.6

12.9

11.6

8.4

35.2

26.3

13.3

13.7

8.9

12.1

15.6

8.6

35.6

10.6

11.3

11.5

14.0

8.5

10.7

6.8

0 10 20 30 40

Trustworthy

Low insurance

premium

Familiarity

Well known

Knew the salesagent

Simple application

procedure

Large company

Have dealt with the

company in the past

%

Figure 3-18 Reason for choosing the company to take out insurance (top 15 items)

142

did not compare with other companies, the group who did compare with other

companies scored high, above 20%, on items such as “low insurance premium,”

“matched my needs the most,” and “attractive product/service.” [Figure 3-19]

Meanwhile, “simple application procedure,” “healthy management,”

“brochures were easy to understand,” and “has good WOM” also accounted for

more than 10%, and the disparities with the group who did not make

comparisons with other companies were large. This may be the result of

consumers who compared multiple companies gaining an image that the life

insurance company from which they got coverage was better than other life

insurance companies on these points. In other words, for consumers who

compared multiple companies, the life insurance from which they got coverage

has been differentiated as a favorable and attractive brand unlike other

companies (the function to differentiate) and has come to be evoked (brand

retention).

The direction of brand formation and establishment that insurance

companies should aim for may be to create an image of “this insurance

company which is unlike other companies” that consumers have a favorable

feeling towards so they would choose the company. Low insurance premium,

attractive products and services, and the health of management that have been

34.5

20.0

12.0

10.8

10.0

9.8

9.7

9.3

8.8

8.2

7.2

6.5

5.6

5.3

4.8

37.7

39.6

13.3

13.3

6.9

15.2

12.0

7.7

11.3

23.1

15.2

24.6

6.0

2.6

10.1

33.8

15.6

12.0

10.3

10.9

8.7

9.3

9.8

8.6

5.3

5.8

3.1

5.5

5.8

3.9

0 10 20 30 40

Trustworthy


Familiarity

Well known

Knew the sales agent

Simple application procedure

Large company

Have dealt with the companyin the past

Easy to consult

Matched my needsthe most

Healthymanagement

Attractive product/service

Sales agent was attentive

Recommended by employer

Brochures were easy

to understand

%

4.5

4.3

3.9

3.4

3.2

2.0

1.9

1.0

0.9

0.7

0.4

0.4

0.2

3.1

10.6

3.9

11.1

9.2

7.7

2.6

4.9

3.9

1.3

2.6

1.9

1.1

0.4

0.6

3.0

1.3

4.7

3.2

2.9

2.8

3.2

1.3

1.6

0.8

0.6

0.5

0.2

0.4

0.1

3.3

12.4

0 10 20 30 40

Recommendation of atrustworthy acquaintance

Has good WOM

Recommendation

of FP

Often see the advertisement

Sales agent wasenthusiastic

Attitude of trying to

meet my needs

Many counters

Excellent consultingservice

Content-richwebsite

Active in CSR

activities

Active in doing business overthe PC or mobile phones

Advanced in securitymeasures

Active in transparency/

disclosures

Others

No particularreason

Total(N = 4021)

Compared with othercompanies(n = 467)

Not compared withother companies(n = 3302)

%

Figure 3-19 Reason for choosing company to take out insurance

143

analyzed above are elements that need to be tackled as a life insurance

company as a whole towards creating a brand image; however, there may be

things that could be changed through simple efforts at the point of contact with

customers, such as proposing products that match the consumer’s needs or

offering easy to understand brochures and explanations.

Insurance as a service product cannot be evaluated simply by looking at it or

taking it in one’s hands. Therefore, consumers are likely forming their image of

the product’s value and corporate policy (brand image) not only from

commercials or publications but also through their communication with sales

channels, such as sales agents and agencies. We often tend to consider that the

role of the channel is merely to gain, maintain, and cultivate contracts, but the

responsibilities to establish and sustain the brand perhaps also rests on the

shoulders of the individual employees who come in contact with clients on a

daily basis.

144

Chapter 4: Differences in the Actions of Examination by Products and

Channels

As we have seen in Chapter 1 of Part 2, Japan’s life insurance market is

saturated. Meanwhile, as we all know, in Japan, more and more people are

marrying and giving birth at later stages in life, and the population is aging.

Therefore, the number of households that do not need death protection, which

are traditional life insurance products, such as single-person households, couples with no children, or empty-nest households consisting only of elderlies

whose children have become independent, is growing. [Figure 4-1]

With such changes in people’s needs for assurance in light of the changes in population and family compositions, sales of policies in the domains of

medical insurance and old-age insurance are growing among life insurance

policies.

Meanwhile, the sales channel for insurance is also diversifying rapidly with

innovation in information technologies, mainly that of the Internet, and deregulation, including the gradual lifting of bans on bancassurance since the

latter half of the 1990. Among such diversifying sales channels in recent years,

the one with the most rapidly growing presence is perhaps the independent

insurance shops. [Figure 4-2]

35.8 38.040.7

43.9 46.849.1

51.8

4.5 5.26.3

7.68.8 9.6

10.2

7.1 7.99.4

11.2 12.914.5

16.8

1.0 1.4 2.02.8

3.74.5 5.3

024681012141618

0

10

20

30

40

50

60

1980 1985 1990 1995 2000 2005 2010

Total households (left axis) Households of couples without chi ldren (r ight axis)Single-person households (r ight axis) Elderly-couple households (right axis)

million households million households

Source: prepared from the "Population Census" by the Statistics Bureau, Ministry of Internal Affairs and Communications

Figure 4-1 Changes in the number of households

140 167 238.5 310 400511

66113

137142

179198

8293

129168

170

184

120129

144

159

162

159

408502

648.5

779

911

1052

0

200

400

600

800

1000

1200

2009 2010 2011 2012 2013 2014

Hoken Clinic

Mitsubachi Hoken

Hoken Minaoshi Honpo

Hoken no Madoguchi

Source: prepared by the author f rom disclosures by the companies

stores

Figure 4-2 Changes in the number of stores of the major 4 companies

145

In this chapter, we will focus on the domains of medical insurance and

old-age insurance, which are still growing in the saturated life insurance

market, as well as the rapidly expanding independent insurance shops to

confirm the characteristics of consumers using the respective channels and

products.

1. Verifying the argument that medical insurance is unnecessary

In Japan, because we have health insurance under a public healthcare system,

the out-of-pocket cost for medical services is extremely low in most cases.

Furthermore, when we look at the medical services provided, the average days

of hospitalization is growing shorter. [Figure 4-3] Considering the above, we

can assume that it is quite rare that people would face situations in which they receive expensive medical bills. Meanwhile, from the perspective of medical

service expenses, there seem to be more cases of short-term hospitalization for

which people are required to pay medical expenses that may not be that

expensive but still represents a burden on the family finances. Under the

preconditions of the current social security system, the questions arise as to whether or not it is necessary to prepare for the considerably low risk of facing

a situation that requires the payment of expensive medical bills with life

insurance (medical insurance), which is a personal method of insurance, or

whether life insurance (medical insurance) is the optimal way of preparing for a situation being required to pay medical expenses although they are not so

expensive but still have a higher risk of occurrence, and whether or not it is not

possible to pay with savings instead of insurances if it is within an amount that

can be covered. Indeed, there are people who talk of the argument that medical

insurance is unnecessary based on such logic as mentioned above, and it may be that the needs of consumers, mainly people that are sensitive to information,

are shifting away from medical insurance.

45.5 47.3 47.4 43.7 43.4 41.8 40.1 39.2 37.434.3

0

5

10

15

20

25

30

35

40

45

50

1984 1987 1990 1993 1996 1999 2002 2005 2008 2011

Source: prepared from the "Patient Survey" by the Ministry of Health, Labour and Welfare

Figure 4-3 Changes in the average number of days of hospitalization

days

146

In this section, we will examine the group supporting this argument that

medical insurance is unnecessary according to consumers’ level of knowledge

on insurance, as well as by the amount of household financial assets.

1-1. Knowledge on insurance and insurance needs

If consumers who came across the argument that medical insurance is

unnecessary agree and are shifting their needs away from medical insurance, it

can be assumed that their confidence in their own knowledge is deepening as

their insurance literacy improves. Then, looking at the relation between the

policies held by consumers and their self-assessment on their knowledge

pertaining to insurance and insurance literacy as seen in the preceding chapter,

the ratio of policyholders were higher for those with higher levels of

knowledge for both medical and cancer insurance with the percentage of

medical/nursing insurance policyholders at 72% for those with a high level of

knowledge and 71% for those with a high level of knowledge according to

their subjective assessment. [Figure 4-4] Meanwhile, as for those who recently

got medical insurance, there seems to be no difference in the amount people

receive according to their level of knowledge when we look at the daily

hospitalization benefit. [Figure 4-5]

57.1

41.8

65.2

72.0

14.2

52.6

70.6

50.7

36.0

58.6

64.4

11.0

45.2

64.0

28.0

18.9

31.6

40.1

6.8

24.2

35.8

2.6

1.9

2.8

4.0

0.9

1.6

3.7

0 10 20 30 40 50 60 70 80

Total(n = 5309)

Those with low levelof knowledge (n = 2075)

Those with medium levelof knowledge (n = 2381)

Those with high levelof knowledge (n = 853)

Low level ofknowledge (n = 646)

Medium level ofknowledge (n = 1912)

High level ofknowledge (n = 2740)

Medical/nursing care Medical insurance Cancer insurance Nursing insurance

%

Insu

ran

ce literacy

Sub

jective

assessm

ent

Figure 4-4 Percentage of people with medical insurance

8,000

8,200

8,000

7,700

7,600

8,200

8,000

7,300 7,400 7,500 7,600 7,700 7,800 7,900 8,000 8,100 8,200 8,300

Total (n = 1747)

Those with low level of knowledge (n = 506)

Those with medium level of knowledge (n = 900)

Those with high level of knowledge (n = 341)

Low level of knowledge (n = 519)



Insu

rance

literacySubjective

assessmen

t

yen

Figure 4-5 Daily hospitalization benefit

147

On the other hand, looking at their intention to take out insurance going

forward, among life insurance policyholders, those with higher levels of

knowledge according to their subjective assessment scored lower for “death

protection,” while no difference could be seen by the level of knowledge for

the ratio of “medical insurance” among both policyholders and

non-policyholders. [Figure 4-6]

1-2. Outstanding financial assets and insurance needs

As we have seen, it seems people are not always supporting the argument

that medical insurance is unnecessary even if they are knowledgeable about

insurance. Then, is the argument that medical insurance is unnecessary

supported by those with more assets who can cover medical expenses with

assets such as savings?

Looking at the ratio of people with medical or cancer insurance by their

outstanding financial assets, the percentage of those with coverage was larger

for the group with more assets, with 67% of the group with outstanding

financial assets of 10 million yen or more being covered. [Figure 4-7]

Meanwhile, the figure was only 40% for those with outstanding assets of less

than 1 million yen, showing a marked difference compared to people with

financial assets of 1 million yen or more. Additionally, the average daily

hospitalization benefits were approximately 8,000 yen for all groups regardless

of the level of outstanding assets, perhaps implying that in terms of actual

coverage, the results run contrary to the argument that medical insurance is

unnecessary. [Figure 4-8] Looking at people’s future intentions to get coverage,

while there is no particular trend among policyholders in the percentage of

51.7

48.1

49.1

47.6

47.7

47.8

47.8

48.4

65.6

61.1

73.8

61.8

69.7

66.4

61.2

47.6

41.6

44.0

40.7

40.6

54.3

43.8

39.8

70.5

70.1

73.8

61.8

78.9

65.8

70.6

26.1

23.7

21.6

26.1

20.9

17.4

23.6

24.2

35.4

34.7

34.6

41.2

42.1

30.8

37.6

25.4

26.9

23.0

30.5

23.8

26.1

26.4

27.4

19.5

16.2

27.1

11.8

22.4

21.2

14.1

18.4

19.0

16.4

19.0

23.0

17.4

18.2

19.5

15.9

15.0

19.6

8.8

11.8

15.8

20.0

0 50 100 150 200 250

Total (n = 1485)

Total policyholders (n = 1177)







Total non-policyholders (n = 308)







Medical security Death protection Income security Old-age security Savings

%

Insu

rance

literacySu

bjective

assessmen

tIn

suran

ce literacy

Sub

jective assessm

ent

Figure 4-6 Insurance coverage people intend to get (top 5)

148

people considering getting medical security, among non-policyholders, the

percentage rose for those with less outstanding assets with the group with

assets of 1 million yen to less than 3 million yen hitting the highest mark at

75%. [Figure 4-9] On the other hand, non-policyholders with assets less than 1

million yen scored 71% or lower than “death protection” (78%), perhaps

indicating that the priority lies in “death protection” when one does not have

any insurance. As we have seen, a certain trend according to the level of

outstanding financial assets could be seen among non-policyholders regarding

their intentions to get medical security coverage and these results may seem to

support the argument that medical insurance is unnecessary. However, as the

percentage of people with death protection and income security were also

higher for the group with less assets among non-policy holders, it can be

considered that non-policyholders with more assets are in a situation that does

not require life insurance in general.

57.1

39.9

55.0

61.5

66.5

50.7

36.1

50.2

54.6

57.6

28.0

17.2

24.4

29.3

36.0

2.6

1.5

1.2

2.4

4.2

0 20 40 60 80

Total(n = 5309)

Less than 1 million yen(n = 1237)

From 1 million to less than

3 million yen (n = 769)

From 3 million to less than10 million yen (n = 1479)

10 million yen or more(n = 1440)

Medical/nursing Medical insurance Cancer insurance Nursing insurance

%

Figure 4-7 Ratio of people with medical insurance coverage (by financial assets)

8,000

7,700

8,000

7,800

8,300

7,000 7,500 8,000 8,500

Total (n = 1747)

Less than 1 million yen (n = 324)

From 1 million yen to less than 3 million yen (n = 242)


10 million yen or more (n = 540)

yen

Figure 4-8 Daily hospitalization benefit (by financial assets)

149

1-3. Insurance literacy, outstanding financial assets and needs for

security As has been seen, no evidence can be found from the relation between the

level of knowledge and outstanding assets that the “argument that medical

insurance is unnecessary” is affecting whether or not people with a high level

of knowledge or those with more assets in taking out insurance. Then is the

situation different for consumers with knowledge on life insurance and

sufficient assets?

Looking at consumer intentions to take out insurance going forward by the

level of knowledge and financial assets, only the group with a low level of

knowledge, both in terms of insurance literacy and subjective assessment,

showed the trend of people with less assets scoring higher for “medical

security” while other groups showed no particular trend. [Figure 4-10] If

anything, the group with less assets scored higher for “death protection” among

those with medium knowledge in terms of insurance literacy and those with a

high level of knowledge in terms of subjective assessment.

51.7

48.1

51.9

45.5

46.8

49.8

65.6

71.0

74.5

55.9

52.6

47.6

41.6

44.9

44.9

42.6

38.3

70.5

77.9

63.8

70.6

52.6

26.1

23.7

24.5

27.3

21.6

23.3

35.4

42.8

29.8

30.9

26.3

25.4

26.9

29.2

27.8

25.8

27.2

19.5

23.4

10.6

19.1

18.4

18.4

19.0

19.0

17.2

18.2

19.5

15.9

18.6

17.0

11.8

10.5

0 50 100 150 200 250

Total (n = 1485)

Total of policyholders (n = 1177)




Over 10 million yen (n = 313)

Total of non-policyholders (n = 308)






%

Po

licyho

lde

rsN

on

-po

licyho

lde

rs

Figure 4-9 Insurance coverage people intend to get (top 5, by outstanding financial assets)

150

As we have seen, although the argument that medical insurance is unnecessary may have spread to some consumers, it has yet to receive the

support of the mass at this point. Perhaps this is because the younger

generation who are likely relatively sensitive to information have not yet built

up enough assets as to refrain from getting medical insurance according to the

argument that medical insurance is unnecessary. Or perhaps the middle to old age group who already have sufficient assets had taken out medical insurance

products by the time they received this information and have not yet taken

actions, such as reviewing their policies or deciding to cancel the policy.

In fact, it could also be seen in a focused group interview we conducted in the past that even among consumers who were sensitive to information and

took out their insurance upon collecting and comparing various information, there are those who prioritize medical security or who select their medical

security upon determining with composure the risks they face in living their

lives, regardless of the level of assets they own, as can be seen below.

・ Took out lifetime medical insurance “because I felt it was extremely

important to have coverage for hospital visits after being discharged

51.7

53.0

60.7

50.0

48.4

45.1

51.6

60.4

52.3

48.6

51.7

49.5

53.1

48.6

47.0

52.3

61.5

75.6

58.3

58.1

41.2

52.7

62.7

48.3

47.3

51.2

49.8

53.5

51.5

47.6

50.2

47.6

52.4

63.5

45.1

52.3

40.7

45.8

53.0

48.4

46.7

39.1

43.2

53.1

57.1

39.8

40.7

69.7

80.0

58.3

64.5

64.7

49.6

61.3

46.0

50.3

37.8

43.0

50.0

48.5

42.4

39.1

26.1

25.8

30.9

20.7

26.6

19.8

27.4

35.8

28.9

21.5

27.0

23.4

24.5

40.0

21.7

20.9

32.8

37.8

25.0

41.9

23.5

25.5

33.8

24.1

21.8

21.3

25.6

29.1

30.6

21.4

25.1

25.4

20.8

22.5

20.7

20.3

19.8

30.0

35.8

25.0

28.5

30.5

22.3

18.4

31.4

21.7

24.4

23.8

26.7

25.0

29.0

11.8

25.0

28.9

24.1

23.6

23.6

26.0

25.6

24.6

24.9

29.0

18.4

15.9

18.5

17.1

13.3

9.9

19.1

20.1

18.0

18.7

19.0

21.2

16.3

14.3

19.3

26.7

13.9

22.2

4.2

9.7

5.9

17.5

16.9

18.4

17.6

15.0

19.6

19.2

18.7

17.9

21.7

0 50 100 150 200 250

Total (n = 1485)

Total of those with low level of knowledge (n = 515)


From 1 million to less than 3 million yen (n = 82)



Total of those with medium level of knowledge (n = 697)





Total of those with high level of knowledge (n = 273)





Total of low level of knowledge (n = 122)





Total of medium level of knowledge (n = 548)





Total of high level of knowledge (n = 812)






%

Insuran

ce literacySu

bje

ctive assessment

Figure 4-10 Insurance coverage people intend to get (top 5)

151

from my experience of having to have to pay a lot of money starting with transportation costs to visit the hospital when I fell ill” (female, 37)

・ Took out lifetime medical insurance to prepare for the remote possibility of becoming hospitalized because “I would not be able to put aside

money after I retire and become a housewife” (female, 51)

・ Got medical insurance after consulting with spouse “because it’s no problem if you can die suddenly, but nowadays, progress in medicine has

enabled people to live on even after falling ill and because it’s more

worrisome if you get ill” (male, 36)

As we have seen, it seems consumers are not determining whether they need to have insurance or how much insurance they get according to the benefits

they can receive from the health insurance system or the modern state of

medicine when considering medical insurance products.

So what kind of process are consumers actually going through when they choose the medical insurance product to take out? In the next section, we will

focus on consumers who took out medical insurance during the past five years

and review their process of examination.

2. Actions of Examination Taken by Medical Insurance Policyholders

2-1. Situation of medical insurance products Looking at life insurance policyholders who took out their policy during the

past five years by product type, the most popular was medical security with

81% having coverage. [Figure 4-11] By gender, more females had medical

insurance with 82% having coverage compared to 80% for males, although the

difference is small. Furthermore, those in their 40s and above scored high for

having coverage with over 80% being insured.

80.9

79.8

81.9

73.0

78.6

82.7

82.3

86.5

67.7

74.4

62.1

60.9

68.7

73.3

71.5

61.3

30.4

31.0

30.0

15.8

23.9

36.7

38.3

35.2

27.6

29.8

25.8

20.5

32.9

36.4

22.8

21.0

0 20 40 60 80 100

Total

(n = 1606)

Male

(n = 738)

Female

(n = 868)






Medical Security Death Protection Annuity Savings

%

Figure 4-11 Types of policies held

152

The annual premium paid for medical security products was 73,800 yen on

average, while daily hospitalization benefits was 8,000 yen. The insurance

premium paid was 73,800 yen for males, which was higher than for females

(67,300 yen), and by age, those in their 40s or above paid more than 80,000

yen, which was higher than those in their 20s (49,000 yen) and 30s (67,000

yen). [Figure 4-12] Daily hospitalization benefit by gender was 9,100 yen for

men, which was 2,000 yen higher than females (7,200 yen). By age group, the

benefit was slightly higher for those in their 40s at 8,700 yen compared to

other age groups. However, there were no statistically significant differences in

these figures.

Meanwhile, as for the number of types of policies held, people who have

taken out medical security products most recently scored low compared to the

overall figures in terms of the percentage of having other types of insurance

with 39% having only medical security policies and 37% having two types of

policies, including medical security. [Figure 4-13]

It goes without saying that the presence of medical security is rising among

insurance policies held, although it does not seem to be the case that the needs

of consumers have completely shifted from death protection to pure

endowment insurance, which implies that medical security products seem to be

Figure 4-12 Annual insurance premium paid/daily hospitalization benefits of most recent policyholders of medical security products

8.0

9.1

7.2

7.8

8.0

8.7

7.7

7.7

0 2 4 6 8 10

Total (n = 784)

Male (n = 320)

Female (n = 464)





60s and above (n = 188)

thousand yen

Dai ly hospitalization benefitsAnnual insurance premium paid

73.8

83.2

67.3

49.4

58.5

85.2

84.1

81.6

0 20 40 60 80 100

Total (n = 784)

Male (n = 320)

Female (n = 464)






thousand yen

30.0

38.6

24.7

17.2

12.1

38.7

36.7

45.3

29.4

37.9

21.5

17.4

21.4

35.0

31.5

9.2

7.0

7.8

17.8

17.7

0.6

0.4

0.8

0.6

0.8

0% 20% 40% 60% 80% 100%

Total (n = 1606)

Medical Security (n = 791)

Death Protection (n = 523)

Savings (n = 163)

Annuity (n = 124)

1 type 2 types 3 types 4 types 5 types

Figure 4-13 Number of types of policies held

153

becoming an entry point.

Then what were the reasons for medical insurance policyholders to get

security and how was the process of examination?

2-2. Reason for getting insurance differing by generation

Looking at the reasons for getting insurance, “life event” scored the highest,

similar to the overall trend, at 29%, followed by “reviewed life plans/family

finances” (24%). [Figure 4-14] Compared to other product types, “commercials,

direct mails,” as well as “for some reason or another” scored high, with “life

event” scoring higher than annuities, “WOM” higher than savings and

annuities, and “reviewed life plans/family finances” higher than savings,

respectively. Meanwhile, the percentage of people who chose “life event” was

lower than those with savings or death protection products. Similarly, the

percentage of people who chose “reviewed life plans/family finances” was

lower compared to those with annuities as was “solicited” compared to those

policyholders of annuities and death protection, respectively.

By the gender of medical insurance policyholders, the percentage of males

choosing “life event” was 33%, which was higher than females (27%). [Figure

4-15] By age group, people in their 20s and 30s scored high for “life event”

with those in their 20s scoring markedly high at 61%. Meanwhile, those in

their 40s and above 60s scored high for “reviewed life plans/family finances”

and those in their 50s scored high for “solicited” compared to other age groups.

As can be seen, the reasons are different by gender and age group.

34.4

24.8

16.2

13.4

12.9

11.5

10.1

7.3

29.2

23.8

12.0

16.2

11.3

16.1

12.9

8.2

37.5

26.8

18.4

13.0

13.6

7.8

8.0

6.7

57.7

14.7

14.1

6.1

16.6

6.1

4.9

4.3

24.2

37.1

37.1

7.3

15.3

4.0

8.1

6.5

0 20 40 60

Life event

Reviewed life plans/

family finances

Solicited

WOM

Rise in income

Commercials,direct mails

For some reasonor another

Others

Total(n = 1606)Medical security(n = 791)Death protection(n = 523)Savings(n = 163)Annuities(n = 124)

%

Figure 4-14 Reason for examining the possibility of getting insurance

154

We also found in a focused group interview conducted in the past that the

younger generation took out their insurance through their parents at the timing

of certain life events:

・ “I took over the policy my parents had when I started working and

changed the name of the policyholder to my name” (female, 25)

・ “I was recommended by my parents immediately before I got married

and simply did exactly as I was told” (male, 31)

In comparison, those in the middle or old-age group tended to examine the

possibility of getting insurance on the occasion of at life events, such as

retirement or someone close falling ill.

・ “Because friends acquaintances who were hospitalized told me they had

to pay more than insurance benefits” (female, 43)

・ “Because we are getting worried about post-retirement and started to ask

ourselves if we should take out insurance to prepare for it” (female, 56)

・ Because we started to wonder “if we should change the coverage

because it would be difficult to continue to pay insurance after retirement”

(male, 59)

2-3. The examination process and determining factor when taking out

insurance

As for the process people with medical security went through when

examining the possibility of getting insurance, “examined the necessity of

assurance” scored high along with people with death protection. Medical

insurance policyholders also scored the highest for three other processes.

[Figure 4-16] In particular, 33% said they “compared companies/products.”

The percentage was eight points higher than for those with death protection

(25%). Looking at the number of companies those who “compared

companies/products” actually compared, medical insurance policyholders

considered 3.31 companies on average, which was higher than people with

death protection (3.24 companies). [Figure 4-17] Furthermore, the former

32.5

26.3

16.717.0

12.1 11.8 11.1 9.0

26.922.0

15.815.4 13.5 12.2 11.3

7.7

60.6

12.8

8.5 8.5

19.1

6.43.2 4.3

36.2

23.6

16.7 12.115.5

8.6

5.78.0

20.0

26.1

18.2 15.2

10.911.5

13.9

10.3

20.6 21.8 18.2 20.6

12.418.8

12.98.2

22.929.3

16.020.2

9.612.2

16.5

8.5

29.2

23.8 16.216.1 12.9 12.0

11.38.2

0

20

40

60

80

Life event Reviewed life

plans/familyfinances

WOM Commercials,

direct mails

For some

reasonor another

Solicited Rise in

income

Others

Male(n = 323) Female(n = 468)

in their 20s(n = 94) in their 30s(n = 174)


60s and above (n = 188) Total(n = 791)

%

Figure 4-15 Reason for examining the possibility of getting medical security coverage

155

reviewed 3.93 types of product plans, which was approximately the same as

people with death protection (3.99 types). As for the perspective of comparison

when examining the possibility of getting insurance, people with medical

insurance scored higher for “contents/scope of coverage” than those with other

types of insurance at 92%. On the other hand, they scored lower for “insurance

premium/refund rate” at 48% compared to those with death protection (64%)

and savings (76%) plans. [Figure 4-18]

48.3

35.1

31.1

29.1

51.1

38.4

34.4

33.0

51.1

32.3

27.9

24.9

38.7

33.7

31.9

27.6

33.1

26.6

21.8

23.4

0 10 20 30 40 50 60

Examined the necessityof assurance

Examined the contents/cost of product

Searched forcompanies/products

Compared

companies/products

Total(n = 1606)

Medical security(n = 791)


Savings(n = 163)

Annuities(n = 124)

%


3.17

3.31

3.24

2.50

2.74

3.81

3.93

3.99

3.20

3.00

0 1 2 3 4 5

Total (n = 467)

Medical security (n = 261)


Savings (n = 45)

Annuities (n = 29)

Number of companies Number of types of products

Figure 4-17 Number of companies/types of companies compared

86.1

85.0

55.7

17.6

7.1

0.9

92.3

87.0

47.9

14.2

5.7

1.5

84.6

86.9

63.8

24.6

10.8

0.0

75.6

75.6

75.6

13.3

4.4

0.0

51.7

72.4

58.6

20.7

6.9

0.0

0 20 40 60 80 100

Contents/scope of coverage

Insurance amount

Insurance premium/refund rate

Management situationof the company

Discount benefits/

preferential treatment

Others

Total(n = 467)

Medical security(n = 261)


Savings(n = 45)

Annuities(n = 29)

%

Figure 4-18 Perspective of comparison

156

By the source of information used, “life insurance comparison sites” scored

the highest at 26% followed by “brochures requested by oneself” (21%). In

addition to “life insurance comparison sites” and “brochures requested by

oneself,” people with medical insurance scored higher for “TV commercials,”

“direct mails,” and “flyers and/or ad inserted in newspapers”, while they scored

lower for “sales agents” compared to people with other types of insurance.

[Figure 4-19]

By the channels they went through to get their insurance, although “sales

agents” were most frequently used accounting for 37%, it was followed by

“postal mail” (17%) and “internet” (14%) accounting for over 10%

respectively. This may indicate that the channels are more diversified

compared to other products. [Figure 4-20]

24.8

21.9

18.6

13.8

13.2

11.9

9.7

9.3

8.7

8.5

8.2

7.9

7.8

6.8

5.4

19.2

25.8

21.3

13.4

13.9

12.2

11.5

11.8

10.7

9.0

11.4

8.3

8.2

5.4

4.6

30.0

17.9

15.3

16.8

11.6

11.6

7.4

7.6

6.3

8.2

5.0

7.1

10.0

8.9

5.0

29.3

18.1

19.0

7.8

14.7

9.5

8.6

4.3

6.0

7.8

6.0

11.2

3.4

6.9

11.2

39.5

17.1

13.2

11.8

11.8

14.5

7.9

5.3

6.6

7.9

1.3

3.9

1.3

6.6

3.9

0 5 10 15 20 25 30 35 40 45

Sales agents

Life insurance

comparison sites


FP

Website of insurance

companies

Opinions of family

member or friends

WOM sites/textboards on life insurance

TV commercials

Direct mails

Financial informationsites

Flyers and/or Ad insertedin newspapers

Insurance agencies

Insurance shops

Books on insurance

Counters ofinsurance companies

Total (n = 1200)



Savings (n = 116)

Annuities (n = 76)

%

Figure 4-19 Information source used

157

As for the final determining factor for taking out the insurance, “insurance

premium was adequate” scored the highest accounting for 47%, significantly

exceeding the “contents of coverage was good” (27%). [Figure 4-21] The fact

that “insurance premium was adequate” is higher compared to other types of

products perhaps indicates that consumers consider the level of insurance

premiums as a significantly important factor when examining the possibility of

getting medical security. There is no major difference by gender among people

with medical insurance products, except for females scoring higher for the

“trustworthiness of the insurance company” at 11% compared to men (6%).

[Figure 4-22] By age group, “insurance premium was adequate” scored the

highest among all age groups, although for people in their 30s, “the contents of

coverage was good” also accounted for 35% and the difference between the

two are smaller.

42.3

36.8

45.5

52.1

52.4

11.3

17.1

6.3

4.9

4.0

9.6

13.5

6.5

6.1

2.4

7.8

8.5

9.0

6.7

0.8

6.4

4.9

5.5

15.3

5.6

20.9

18.1

24.3

12.9

33.9

1.7

1.1

2.9

1.8

0.8

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (n = 1606)



Savings (n = 163)

Annuities (n = 124)

Sales Agents Telephone/Mail Internet Insurance Shops Counter Other NA/DK

Figure 4-20 Channels through which people took out insurance

40.4

46.5

38.0

30.1

26.6

28.5

26.8

30.6

29.4

28.2

11.5

9.0

13.8

11.0

18.5

10.5

8.8

9.0

19.0

15.3

4.4

3.5

5.0

4.3

7.3

2.1

2.1

1.9

3.1

1.6

2.4

2.9

1.5

2.5

2.4

0.2

0.3

0.2

0.6

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (n = 1606)



Savings (n = 163)

Annuities (n = 124)

Insurance premium was adequate Contents of coverage was good

Recommendation of sales agent Trustworthiness of the insurance company

Well-directed support Hopes for service after taking out policy

Others NA/DK


158

As has been seen, the occasion of examining the possibility of getting medial insurance differs depending on the age. Meanwhile, regardless of their

age, people seem to be scrutinizing the balance of content and price more

strictly than when they are examining other products. In the medical insurance

market where products are becoming diverse, it can be imagined that it is quite difficult to develop a product that is predominantly superior to other companies’

products. Perhaps it is necessary to think of what can be done to have

consumers acknowledge the added value compared to the price (insurance

premium) so that we can avoid falling into price competition with rival

companies.

3. Actions of Examinations taken by People with Annuities

It seems there is high interest in whether or not there is a need to make

efforts to support oneself after retirement among people of all generations in

light of their strong distrust in the overall social security system, including the public pension system. In this section, we will focus on annuities which are

one of the representative securities for the aged, and review the characteristics

of the awareness and attribution of consumers who took out their policies

during the past five years.

3-1. Situation of annuity products Going through the attribution of consumers who took out annuities during

the past five years—by gender, females accounted for 59% or approximately 60%; while by age, those in their 30s accounted for the most at 25%, followed

by those in their 40s (22%) and those in their 60s and above (21%) in this order.

[Figure 4-23] By gender and age group, for males, those in their 30s accounted

for the most at 34% followed by those in their 60s and above (24%); while for

females, the two generations of those in their 50s and 40s together accounted

46.5

48.3

45.3

44.7

45.4

50.3

47.1

44.7

26.8

26.3

27.1

24.5

35.1

24.8

21.8

26.6

9.0

9.6

8.5

10.6

6.3

7.3

12.4

9.0

8.8

5.9

10.9

8.5

8.6

8.5

8.2

10.1

3.5

4.3

3.0

2.1

1.1

2.4

5.3

5.9

2.1

1.5

2.6

5.3

3.4

1.2

0.6

1.6

2.9

3.7

2.4

3.2

4.8

4.7

2.1

0.3

0.3

0.2

1.1

0.6

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (n = 791)

Male (n = 323)

Female (n = 468)






Insurance premium was adequate Contents of coverage was goodRecommendation of sales agent Trustworthiness of the insurance companyWell-directed support Hopes for service after taking out policyOthers NA/DK


159

for more than half, with the former accounting for 26% and the latter for 23%. [Figure 4-24]

3-2. Reason for examining the possibility of getting insurance

Looking at the reasons for taking out insurance, overall, “reviewed life

plans/family finances” and “solicited” scored the highest, both at 37%, with

“life event” (24%) and “rise in income” (15%) also scoring high. These were

the items exceeding 10%. [Figure 4-25] As we saw in the previously cited

figure 4-14, compared to other product types, people with annuity scored

higher for “reviewed life plans/family finances” and “savings” and lower for

“commercials and direct mails.”

Male40.3

Female59.7

(%)

N=124

Figure 4-23 Gender of people with annuities

12.9

12.0

13.5

25.0

34.0

18.9

21.8

20.0

23.0

19.4

10.0

25.7

21.0

24.0

18.9

0% 20% 40% 60% 80% 100%

Total (n = 124)

Male (n = 50)

Female (n = 74)

in their 20s in their 30s in their 40s in their 50s Over 60s

Figure 4-24 Age composition of people with annuities

38.0

32.034.0

12.0 8.0

4.04.0

4.0

36.5

40.5

17.617.6

8.19.5 4.1 8.1

12.5

25.0

37.5

18.8

6.312.5

6.3 6.3

29.0

38.7

29.0

3.2

9.76.5 6.5 6.5

44.4

25.9

14.87.4

14.8

7.47.4

11.1

58.3

41.7

12.516.7

0.0

8.3

0.04.2

34.6

50.0

30.834.6

7.73.8

0.0

3.8

37.1 37.124.2

15.38.1 7.3

4.0 6.5

0

10

20

30

40

50

60

70

Reviewed life

plans/familyfinances

Solicited Life event Rise in income For some

reason oranother

WOM Commercials,

direct mail

Others

Male(n = 50) Female(n = 74)



60s and above(n = 26) Total(n = 124)

%

Figure 4-25 Reason for examining the possibility of getting annuity

160

By gender, men scored high for “life events” at 34% while women scored higher than men for “solicited” (40%) and “rise in income” (18%). Moreover,

women scored higher than men for “WOM” as well at 10%. By age group,

those in their 40s to 50s tended to score high for “reviewed life plans/family

finances” and those in their 50s and above scored relatively high for “solicited” as well. Furthermore, those in their 50s and above also scored high for “rise in

income” which seems to imply the possibility that receiving retirement benefits

could also be a reason for taking out annuities.

3-3. The examination process and determining factor when taking out

annuities Looking at the actions taken when examining the possibility of getting

annuities, overall, “examined the necessity of assurance” scored the highest at

33% followed by “examined the contents/cost of product” (27%), “compared

companies/products” (23%) and “searched companies/products” (22%) in this

order. [Figure 4-26] By gender, men scored higher for all three actions apart

from “examined the necessity of assurance” compared to women. By age group, those in their 30s to 40s tended to score high for “examined the

necessity of assurance” and “examined the contents/cost of product” while

those in their 60s and above showed a lower rate of execution compared to the

overall figures for all actions.

By the major reasons for examining the possibility of taking out annuities,

those who started to consider because they reviewed their life plans or family

finances scored high for executing all three actions other than “examined the

33.1

34.0

32.4

31.3

38.7

48.1

33.3

11.5

26.6

34.0

21.6

37.5

32.3

25.9

20.8

19.2

23.4

34.0

16.2

31.3

19.4

29.6

20.8

19.2

21.8

28.0

17.6

25.0

25.8

33.3

16.7

7.7

0 10 20 30 40 50 60

Total(n = 124)

Male(n = 50)

Female

(n = 74)



in their 40s

(n = 27)



Examined the necessity of assurance




%


161

necessity of assurance” compared to the overall execution rate, while those

who did so because of life events scored high for “compared

companies/products” and “searched for companies/products.” [Figure 4-27]

Meanwhile, those who started to examine because they were solicited scored

low for “compared companies/products” and “searched for

companies/products.” This implies that as they are being solicited by the seller,

such as sales agents or at the counter of financial institutions, they are not

taking actions to search for products from other companies that are more

advantageous or that better fit their own needs but are examining only the plan

that was suggested by the seller and taking it out as it was proposed.

As a result, the determining factor for taking out annuities is balanced

between the “content of coverage was good” at 28% and “insurance premium

was adequate” at 27%. [Figure 4-28] By gender, males scored higher for

“insurance premium was adequate” than females, while females scored higher

for “recommendation of sales agent.” By age group, those in their 40s to 50s

scored high for “well-directed support” compared to the overall figure,

indicating there is a difference in the determining factor by age group.

Moreover, by the major reasons for taking out annuities, “insurance premium

was adequate” accounted for the most among those who were prompted

because they reviewed their life plans/family finances at 35%, which was

higher than the overall figure. [Figure 4-29] Meanwhile, “recommendation of

sales agent” accounted for the most among those who were solicited at 35%,

while “content of coverage was good” accounted for the most among those

who got annuities because of life events at 43%. These figures were higher

than the overall figures respectively. As can be seen, the determining factor for

taking out annuities differs not only by gender and age, but also by the reason

they started considering getting assurance.

33.1

37.0

34.8

33.3

26.6

34.8

26.1

26.7

23.4

39.1

19.6

33.3

21.8

32.6

15.2

26.7

0 5 10 15 20 25 30 35 40 45

Total(n = 124)

Reviewed life plans/

family finances (n = 46)

Solicited(n = 46)

Life events(n = 30)

Examined the necessity of assurance Examined the contents/cost of productCompared companies/products Searched for companies/products

%


162

3-4. Examination process that differs depending on insurance literacy The level of knowledge that consumers have on insurance seems to have a

significant effect on why there is such difference in the actions people take

when examining the possibility of taking out annuities. Looking at the reasons

for taking out annuities by the level of insurance literacy we saw in the

preceding chapter, “reviewed life plans/family finances” scored the highest

among people with medium and high level knowledge, while among those with

a low level of knowledge, “solicited” scored higher at 35% than “reviewed life

plans/ family finances” (21%). [Figure 4-30] Furthermore, “for some reason or

another” and “WOM” also scored higher compared to people with medium or

high levels of knowledge, perhaps implying that those with a low level of

knowledge are choosing their product and insurance company without a

thorough examination, merely because they were solicited or because of some

vague needs or some word-of-mouth. Meanwhile, “solicited” scored higher

among those with medium and high levels of knowledge compared to those

28.2

28.0

28.4

25.0

32.3

25.9

12.5

42.3

26.6

34.0

21.6

31.3

25.8

29.6

25.0

23.1

18.5

14.0

21.6

18.8

19.4

11.1

29.2

15.4

15.3

16.0

14.9

18.8

19.4

7.4

20.8

11.5

7.3

4.0

9.5

3.2

14.8

12.5

3.8

1.6

2.0

1.4

6.3

3.7

2.4

2.0

2.7

7.4

3.8

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (n = 124)

Male (n = 50)

Female (n = 74)






Content of coverage was good Insurance premium was adequate

Recommendation of sales agent Trustworthiness of the insurance company

Well-directed support Hopes for service after taking out policy

Others


28.2

23.9

28.3

43.3

26.6

34.8

13.0

26.7

18.5

8.7

34.8

16.7

15.3

19.6

13.0

3.3

7.3

13.0

8.7

6.7

1.6 2.4

2.2

3.3

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total

(n = 124)

Reviewed life plans/family finances (n = 46)

Solicited

(n = 46)

Life events(n = 30)

Content of coverage was good Insurance premium was adequateRecommendation of sales agent Trustworthiness of the insurance companyWell-directed support Hopes for service after taking out policyOthers


163

with a low level of knowledge; however, “reviewed life plans/family finances”

scored even higher, implying that people of these groups are, upon being

solicited, analyzing their own life plans and family finances with composure

and examining whether or not they need the security, and if yes, which product

they should get from which company.

In fact, looking at the actions taken by consumers when examining the

possibility of taking out annuities by their insurance literacy, those with a high

level of knowledge scored higher for “examined the necessity of assurance,”

“compared companies/products” and “searched for companies/products”

compared to the group with a low level of knowledge, while those with a low

level of knowledge scored high for “examined the contents/cost of product” at

31%, which was higher than the score for those with a high level of knowledge

(24%) and a medium level of knowledge (26%). [Figure 4-31] Furthermore,

those with a medium level of knowledge scored higher for “examined the

necessity of assurance” at 39% compared to the group with high level

knowledge (31%) as well as the group with a low level of knowledge (21%).

These results support our abovementioned hypothesis that while people with a

low level of knowledge end up taking out annuities without sufficient

examination, those with medium or high levels of knowledge may be

examining the necessity of taking out annuities and then getting the coverage

upon making comparisons between companies and products.

As has been seen, for annuities as well, the reasons and actions taken when

examining the possibility of getting coverage seems to differ depending on the

consumer’s age and level of knowledge on insurance.

37.1

37.1

24.2

15.3

8.1

7.3

4.0

6.5

20.7

34.5

24.1

17.2

13.8

10.3

6.9

6.9

40.9

36.4

28.8

9.1

6.1

7.6

4.5

7.6

44.8

41.4

13.8

27.6

6.9

3.4

0.0

3.4

0 5 10 15 20 25 30 35 40 45 50

Reviewed life plan/family finances

Solicited

Life event

Rise in income


WOM

Commercials, direct mails

Others

Total (n = 124)




%

Figure 4-30 Reason to start examining the possibility of getting insurance (by insurance literacy)

164

The reason for examining the possibility of taking out annuities seems to

differ depending on what kind of meaning the consumers find in life events in

their respective generations. Moreover, the actual actions taken when

examining the possibility to get insurance differed according to these reasons,

as well as the level of insurance literacy of the consumer. Also considering the

fact that the level of satisfaction after taking out insurance is higher among the

group with a high level of knowledge who actively made their examinations as

explained in the preceding chapter, it is important to improve the level of

consumer knowledge by providing appropriate information in line with their

respective level of knowledge and to encourage them to actively examine such

information in the course of soliciting people to take out annuities as well.

Furthermore, when soliciting people, perhaps it is necessary to not only

emphasize the advantages of the product but to also be considerate of how to

appeal the adequateness of the insurance premium.

4. Consumers who Use the Shop Channel (independent insurance shops)

As stated in the beginning of this chapter, the channel that is most rapidly

increasing its presence in recent years among the rapidly diversifying insurance

sales channels is the independent insurance shop channel. [Previously cited

figure 4-2] In recent years, it was not unusual to find independent insurance

shops in shopping streets or large-scale commercial facilities. Although the

situation may differ depending on the shop or the day of the week or time of

the day, it is not uncommon to find several groups of consumers sitting at the booths receiving consultation. Independent insurance shops seem to have

quickly become widely accepted as the place to receive consultation and take

out insurance. In this section, we will focus on the independent insurance shop

channel, which is quickly expanding, and look into the characteristics of the

consumers who use this emerging channel.

33.1

26.6

23.4

21.8

20.7

31.0

24.1

20.7

39.4

25.8

18.2

19.7

31.0

24.1

34.5

27.6

0 5 10 15 20 25 30 35 40 45

Examined the necessity of assurance




Total(n = 124) Those with low level of knowledge(n = 29)

Those with medium level of knowledge(n = 66) Those with high level of knowledge(n = 29)

%

Figure 4-31 Actions taken when examining the possibility to get insurance (by insurance literacy)

165

4-1. Recognition of independent insurance shops First, let us see how recognition is spreading of these independent insurance

shops, which are quickly expanding in terms of the number of shops in recent

years.

According to a quantitative survey result, overall, 62% of consumers

recognized independent insurance shops, [Figure 4-32]. By whether or not the

person has life insurance, 67% of policyholders recognized these shops,

displaying a higher recognition rate than non-policyholders (48%).

Looking at the recognition rate by gender, females policyholders (72%) and

non-policyholders (55%) both scored higher than males (62% and 43%,

respectively). [Figure 4-33] By age group, the recognition rate of policyholders

in their 20s to 30s exceeded 70%, with people in their 30s scoring a high 77%.

As for non-policyholders, those in their 40s or younger scored high with more

than half of the respondents recognizing this channel. The recognition rate

declined as people grew older, namely for those in their 40s and above for both

policyholders as well as non-policyholders. In particular, the recognition rate

was below 40% for non-policyholders in their 50s and older.

Recognize62.4

67.0

48.3

Do not recognize37.2

32.7

51.2

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total(n = 5309)

Policyholders

(n = 4021)

Non-policyholders(n = 1288)

Figure 4-32 Recognition of Independent Shops

62.4

67.0

62.4

71.5

74.2

77.1

68.2

64.9

56.7

48.3

42.9

54.5

53.0

52.2

50.0

38.4

30.2

0 20 40 60 80 100

Total (n = 5309)

Policyholders (n = 4021)

Male (n = 2000)

Female (n = 2021)






Non-policyholders (n = 1288)

Male (n = 686)

Female (n = 602)






%

Policyh

oldersN

on

-po

licyho

lders

Figure 4-33 Recognition of Independent Shops

166

4-2. Use of independent insurance shops As has been seen, currently more than 60% of people who have life

insurance, as well as almost half of non-policyholders, recognize independent

insurance shops. So how much are these shops actually being used and what

kind of consumers is using these outlets?

Looking at the use of independent insurance shops as a source of

information when examining the possibility of getting insurance among

consumers who took out life insurance during the past five years, overall only

8%, or less than 10%, have used these shops. [Figure 4-34] That said, by the

timing of when the people took out their insurance, the usage rate has gradually

risen to double from the 5% in 2008 to 10% for those who got their policy in

2011 or later. Looking at the attribution of users, by gender, more females than

males used independent insurance shops as an information source with 10% of

females replying positively compared to 6% of males. By age group, more

people in their 20s to 30s replied positively than those in their 40s or older with

over 10% of the younger generation using independent insurance shops as an

information source. [Figure 4-35]

7.8

4.5

5.7

6.8

9.7

0

2

4

6

8

10

Total

(n = 1200)

2008

(n = 156)

2009

(n = 159)

2010

(n = 264)

2011 or

later(n = 621)

%

Figure 4-34 Use of Independent Shops as information source

7.8

5.9

9.7

10.3

12.1

5.7

4.8

5.1

5.6

7.1

11.5

0 2 4 6 8 10 12 14

Total (n = 1200)

Male (n = 580)

Female (n = 620)









%

Insuran

celite

racy

By

ag

eB

y

gen

der

Figure 4-35 Use of Independent Shops as information source

167

We can also look at the usage rate by insurance literacy, in order to uncover

the characteristics of those who used independent insurance shops as an

information source; while only 6% of those with low level of knowledge used

these outlets, the percentage was high at 12% for those with high level of

knowledge. Furthermore, looking at the Top 2 Box of how people think of life

insurance, 79% of those who used independent insurance shops as an

information source said “I would choose different companies to take out

policies depending on the purpose.” The score was 19 points higher than the

overall figure. Moreover, they scored 17 points and 11 points higher than the

overall figure respectively for “I would take out the policy after comparing the

features” (90%), and “I'm interested in the reputation of the company and

product” (43%). [Figure 4-36] Furthermore, they scored higher in general for

other items as well, showing that those who use independent insurance shops

as a source of information are more involved with life insurance.

Meanwhile, only 8% used independent insurance shops as a channel to take

out insurance, which is lower than sales agents (42%), telephone/postal mail

(11%), and the Internet (10%). [Figure 4-37] Looking at this result by when

73.4

59.3

50.8

47.3

46.4

42.3

34.3

31.8

27.8

23.5

21.7

21.3

21.3

18.4

16.4

90.4

78.7

56.4

55.3

42.6

45.7

38.3

42.6

35.1

28.7

25.5

21.3

20.2

18.1

19.1

0 10 20 30 40 50 60 70 80 90 100

I would take out the policy

after comparing the features

I would choose different companies to take

out policies with depending on the purpose

I'm concerned whether the

product is what I expect it to be

If the contents are similar, I would search

thoroughly for the least expensive insurance

It's a hassle to deal with

more than one company

I would get minimal insurance

even if I have money to spare

I would ask someone who knows insurance companies

and products well before taking out a policy

I'm interested in the reputation

of the company and product

I'm interested in new products

I constantly collect

information on insurance

I can understand financial and

insurance terms that I see and hear

I have a knowledgeable acquaintance that

I can refer to i f it’s absolutely necessary

I would take out my insurance

with a well-known company

I would take out the insurance even if it

were expensive if the product were good

I would take out insurance that

is selling well or is popular

Total (n = 1200)

Insurance Shops (n = 94)

%

Figure 4-36 How people think of life insurance

168

people got their insurance, the ratio has risen from 5% five years ago (2008) to

10% of those who got insurance in or after 2011. This shows that independent

insurance shops are gradually increasing their presence, despite still being an

emerging channel, in a similar trend as was seen in the use of independent

insurance shops as an information source as mentioned above. Meanwhile, the

use of “sales agents” fell from 45% in 2008 to 39% of those who got insurance

in or after 2011, as did “telephone/postal mail” from 15% to 10% over the

same period. The two channels have dropped their shares about 5 points,

respectively, and this group who used to use these channels are perhaps shifting

to independent insurance shops.

Looking at the life insurance product types that consumers are actually

getting at independent insurance shops, “medical security” scored the highest

at 53% followed by “death protection” at 37%. [Figure 4-38] Whereas, among

those who took out insurance from sales agents, “medical security” scored 43%

and “death protection” scored 35% and among those who got insurance

through postal mail, “medical/nursing insurance” scored 74% and “death

protection” scored 18%. Although independent insurance shops are the same as

sales agents in the sense that you face a person when you go through these

channels, the product sold at these shops may be slightly inclined towards third

market products for which the needs of consumers is relatively clear.

42.3

39.2

42.5

50.5

44.5

11.3

9.8

12.4

11.7

14.7

9.6

9.5

9.8

9.5

9.7

7.8

9.5

8.3

4.1

5.0

6.4

6.0

8.0

5.9

5.5

20.9

24.3

17.5

16.2

18.5

1.7

1.6

1.4

2.3

2.1

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (n = 1606)

2011 or later (n = 798)

2010 (n = 348)

2009 (n = 222)

2008 (n = 238)

Sales agent Telephone/postal mail Internet Independent Shops Counter Others NA/DK

Figure 4-37 Channel through which I got insurance

49.3

42.9

74.2

69.5

53.2

38.2

32.6

35.1

18.1

22.1

37.3

28.4

10.1

12.5

4.4

6.5

8.7

24.5

7.7

9.6

2.7

1.9

0.8

6.9

0.3

0.5

2.0

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total (n = 1606)



Internet (n = 154)

Independent Shops (n = 126)

Counter (n = 102)

Medical/Nursing insurance Death protection Savings Annuities Others

Figure 4-38 Types of products taken out

169

As has been touched upon in the preceding chapter, people who took out

their insurance through independent insurance shops also tended to have a high

level of knowledge in terms of insurance literacy. [Previously cited 3-13] As to

how they think about insurance, they are expected to show high involvement as

was the case for those who used independent insurance shops as a source of

information. In fact, looking at the channels through which people took out

insurance by the reason why they began examining the possibility of getting

insurance, the group who cited life events or the reviewing of life plans/family

finances scored higher than the overall figure with more than 10% purchasing

their policy from independent insurance shops. From this result, we can

assume that people’s involvement in life insurance grows as they face life

events or as they review their life plans or family finances, and in the process

of actively examining the possibility of getting insurance, they come to use

independent insurance shops. [Figure 4-39]

4-3. Reason for choosing independent insurance shops

Looking at the reason why consumers who chose independent insurance

shops did so, overall, the top three reasons were “the attendant was trustworthy”

(22%), “because it was convenient” (18%), and “gave sincere advice” (14%) in

that order. Meanwhile, as for those who took out their policy through

independent insurance shops, “could compare many companies” accounted for

40% scoring 41% followed by “could get abundant information” (29%) and

“because I could learn exactly what I wanted to know” (24%) in that order.

[Figure 4-40] Compared to those who went through sales agents, people who

got insurance at independent insurance shops scored 10 or more points higher

for their top three reasons as well as “procedure could be completed nearby”

(20%), “could consolidate the contact point with other products,” and “because

I could choose myself” (both scoring 14%). Conversely, for the items “the

Figure 4-39 Channel from which insurance was taken out

42.3

42.9

33.2

71.2

53.5

42.0

22.8

38.9

11.3

9.1

7.3

3.1

13.5

9.7

32.6

16.7

9.6

9.1

9.0

0.4

8.8

8.7

19.6

16.7

7.8

10.9

11.6

1.2

8.4

9.2

4.9

7.4

6.4

5.6

4.8

3.5

6.5

9.7

4.3

5.6

20.9

20.7

33.2

20.8

8.8

20.3

15.8

8.0

1.7

1.8

1.0

0.0

0.5

0.5

6.8

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Total

(n = 1606)

Life event (n = 552)

Reviewed life plans/familyfinances (n = 398)

Solicited(n = 260)

WOM(n = 215)

Rise in income

(n = 207)Commercials, direct mail

(n = 184)For some reason or another

(n = 162)

Sales agent Telephone/postal mail Internet Independent Shops Counter Others NA/DK

Figure 4-39 Channel from which insurance was taken out

170

attendant was trustworthy” (15%), “the insurance company was trustworthy”

(4%), and “because it was a family member or a friend” (8%), those who got

their insurance at independent insurance shops scored 10 or more points lower

than people who went through sales agents. As can be seen, while people who

went through sales agents cited personal character or relationship, such as “the

attendant was trustworthy” or “because it was a family member or a friend” or

“gave sincere advice” as the reason for choosing the channel for getting

insurance, those who took out their insurance at independent insurance shops

cited functional aspects as their top reasons, such as being able to compare

with other companies or the abundance, ease of understanding, and certainty of

availability of information. From the above, we can understand that although

both channels go through humans, their characteristics are completely

different.

21.8

17.7

13.7

12.8

11.8

11.0

10.6

10.5

8.5

8.3

8.2

8.0

6.8

6.7

6.2

5.8

4.6

3.7

2.9

0.3

4.7

15.1

10.3

20.6

6.3

4.0

19.8

7.9

7.9

11.1

14.3

23.8

13.5

1.6

40.5

28.6

1.6

4.8

13.5

0.0

0.0

3.2

36.2

7.8

16.9

9.4

16.1

9.9

2.7

18.4

5.9

7.7

5.9

2.4

1.0

1.5

3.7

4.3

6.8

2.2

1.6

0.7

6.5

0 10 20 30 40 50



Gave sincere advice

There was no need to make visits

The insurance companywas trustworthy

Procedure could becompleted nearby


Because it was a familymember or a friend

Materials and informationwere easy to understand

Because I could obtain theinformation I wanted to know

Because I could learn exactlywhat I wanted to know

Because I could choose by myself

There was no need togo through a person

Could compare many companies

Could get abundant information

Because the insurancepremium was lower

Because of the dedicatedrecommendation of the attendant

Could consolidate the contactpoint with other product(s)

There was a discount on the premium

Because they come to collectthe money every month

Others

Total (n = 1606)



%

Figure 4-40 Reason for choosing the channel to take out insurance from

171

As we have seen, for those who got their insurance at independent insurance

shops, the biggest benefit was to be able to compare products between different

companies. Looking at the actual experience of comparing products by the

channel through which people took out their insurance, 60% of those who went

through independent insurance shops had actually made comparisons. This

percentage is markedly higher than those who got insurance through the

Internet (45%), telephone/postal mail (39%), or sales agents (21%). [Figure

4-41] Furthermore, as to whether or not people compared between companies,

48% of those who got their policies at independent insurance shops had done

so. The figure is outstandingly high compared to the mere 10% to 20% for

those who went through other channels. However, in terms of the number of

companies and products (plans) they actually compared, the result was 3.2

companies and 3.9 products, which was slightly more than that of people who

went through sales agents (2.5 companies, 3.1 products) but less than those

who took out insurance through telephone or postal mail (4.0 companies, 4.3

types) and about the same level as the overall figures (3.2 companies, 3.8

products). [Figure 4-42]

From these results, we can see that consumers who got insurance at

independent insurance shops had the desire to compare companies and

products and visited these shops to do so. That said, these people are most

likely not thinking of actually going so far as to comparing all companies or

combing through all products. Indeed, in a focused group interview conducted

in the past, although people voiced concerns about considering products from

only one company, they also worry that they will not be able to make a

decision if there are too many subjects to compare, as seen below:

29.1

60.3

20.6

39.0

44.8

23.5

19.5

47.6

14.0

24.2

26.0

14.7

0 20 40 60 80

Total(n = 1606)

Independent Shops(n = 126)

Sales agents(n = 679)


(n = 182)

Internet(n = 154)

Counter(n = 102)

Compared companies/products Of which those who compared companies

%

Figure 4-41 Percentage of people comparing between companies/products

172

・ A sales agent of a life insurance company brought two plans and gave

me explanation, but I was not comfortable choosing between only two

plans from the same company. I (told the shop about my requirements

and) decided to get insurance from one of the three companies they

suggested. (Female, 40s)

・ I was looking at brochures at the shop in the Ito Yokado supermarket

where I always go to but there were too many choices and I couldn’t

understand very well. (Female, 40s)

Perhaps behind such comments is the fact that even proactive consumers

who visit shops themselves to get life insurance do not have enough knowledge

to compare different products of various companies and to assess what is better

or worse for him or herself.

In the abovementioned focused group interview as well, we can see that the

fact that an expert would give thorough explanation had more influence than

being able to compare as a factor to determine which insurance to take out, as

can be seen below:

・ Because the lady is behind the counter, she cannot be aggressive even if I

would go in to get a brochure. We chatted a bit but I did not feel uneasy

since she never asked me details, not even my name. (Male, 40s)

・ Because they offer products from different companies, they don’t win or

lose no matter which product is sold. If it were only one company, I

would think they would sell the insurance that they want to sell, but with

the former, it is equal. (Male, 50s)

・ When you’re looking at comparison sites, if you come up with a question, you have to find the answer yourself. But with a professional

advisor, I could get the answer immediately. I would not be wasting any

time. (Female, 30s)

3.17

3.22

2.53

4.04

3.33

2.94

3.81

3.93

3.14

4.27

3.50

3.69

0 1 2 3 4 5

Total

(n = 1606)

Independent Shops

(n = 126)

Sales agents

(n = 679)


(n = 182)

Internet

(n = 154)

Counter

(n = 102)

Number of companies Number of product types

Figure 4-42 Number of companies/products compared

173

4-4. Outlook going forward As we have seen, the reason why the independent insurance shop channel

has rapidly increased presence in recent years, is perhaps because its functional

aspects, such as the fact that people can compare with other companies, that

there will certainly be abundant information that is easy to understand,

matched the needs of consumers who are very much involved with life

insurance and whose insurance literacy is basically high.

Then are independent insurance shops going to increase their presence even

further and become a common sales channel for life insurance going forward?

Among consumers who intend to take out life insurance going forward, 15%

in total said they would want to use independent insurance shops as an

information source when examining the possibility of getting insurance.

[Figure 4-43] By gender, 18% of females replied positively, scoring higher

than males (13%) and those in their 20s to 30s scored higher than those in their

30s and above with slightly below 20% saying they would use independent

insurance shops as an information source.

As for the channel people who intend to get life insurance would want to use

when getting their policy, 10% cited independent insurance shops. Although

females scored slightly higher by gender as did those in their 20s to 30s by age

group, there is no significant difference overall.

Considering the fact that the use of independent insurance shops as an information source at the time of taking out the most recent insurance was 10%

even among those who got their policy in or after 2011, such use is sure to

expand. On the other hand, regarding the use of independent insurance shops

as the channel to purchase insurance from, the rate of use has remained near

the level of that by those who took out their insurance in or after 2011,

14.9

12.6

17.5

18.8

17.9

14.9

10.6

11.2

9.6

8.0

11.2

9.2

12.1

11.4

4.8

9.0

0 5 10 15 20

Total(n = 1485)

Male(n = 763)

Female(n = 722)






Information source

Channel to take outinsurance from

%

Figure 4-43 Intention to use when examining the possibility of getting insurance in the future

174

implying that it will be difficult to increase the use as a channel to get

insurance.

That said, looking at the level of satisfaction and loyalty in terms of the

percentage of the Top 2 Box by the channel people got their insurance from

among those who took out insurance during the past five years, the level of

satisfaction of policyholders who went through independent insurance shops

was 75% or slightly higher than the overall figure (72%). As for the intention

to reuse, the percentage was 46%, which was somewhat lower than the overall

figure (49%). However, the intention to recommend was 48%, which was

higher than the overall figure (43%). [Figure 4-44] This may imply the

possibility that the number of consumers who visit independent insurance

shops in the examination stage because they were recommended to do so by

people around them will increase as the number of people who have

experienced using independent insurance shops grows.

In addition to those who go to these shops on their own, more consumers

will be using these shops because they were recommended by people who have

actually been there. This should enhance the independent insurance shops’

position as a source of information even more rapidly going forward. Whether

or not it will grow as a channel from which to take out insurance would depend

on how consumers who used the independent insurance shop as a source of

information assess the office and staff they visit.

71.9

70.4

68.6

76.9

74.6

76.6

49.3

52.3

54.9

51.6

46.0

52.6

43.1

42.9

46.1

50.5

48.4

47.4

0 30 60 90

Total (n = 1606)


Counter (n = 102)



Internet (n = 154)

Level of satisfaction Intention to use again Intention to recommend

%

Figure 4-44 Level of satisfaction/loyalty

175

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All rights reserved. No part of this publication may be reproduced without the prior permission of the publisher.

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Chiyoda-ku, Tokyo 100-0014, Japan

Telephone: 81-3-5501-6570 Fax: 81-3-5501-6448

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