Japan's Post Office Starts Selling Life Insurance
The Japan Post Group has started distributing ING Life Japan's life insurance products, the latest service that it has been allowed to do following its privatisation last year.
Japan Post Bank and Japan Post Network are selling ING Life Japan's single premium variable annuity products. Japan Post Insurance sells the firm's corporate-owned life insurance products.
The partnership will allow ING to increase top line growth in the hard-to-penetrate Japanese market, which is one of the world's largest life insurance markets. It will extend ING's existing distribution network of 50 banks and securities houses for SPVA products and nearly 6,000 independent agents for COLI products.
Hans van der Noordaa, chairman of ING Insurance Asia-Pacific, says this partnership is in line with ING's growth strategy of expanding its distribution reach in Asia, as well as its commitment to the Japanese market.
ING Life Japan, a unit of Netherlands-based ING, launched its business in 1986 as the first European life insurance company in Japan and was the first company to introduce variable annuity products to the Japanese market.
Japan Post Bank, Japan Post Network and Japan Post Insurance are all part of the Japan Post Group, and are privatised entities formed following the privatisation of the former Government postal service.
Japan Post Network and Japan Post Bank have also started selling variable annuity insurance products for Sumitomo Life Insurance, Mitsui Sumitomo MetLife Insurance and Alico Japan. The products will initially be sold at 161 outlets across the country, which will expand to about 320 by October.
Variable annuity insurance is an investment instrument whose benefits—distributed when premium payments end—are determined by the investment yield. It is similar to an investment trust in that the money collected from customers is managed by investment funds, but premiums are tax-deductible like life insurance.
Selling life insurance products is the third new service that the Japan Post Group has been allowed to undertake since its privatisation started in October last year. The other two are credit card issuance and housing loan arrangement services.
Japan Post Insurance, meanwhile, started offering products to corporate customers in late-2007, in partnership with life insurers that have lent their expertise in marketing products. The eight companies it is working with include ING Life Japan, Axa Life Insurance American Life Insurance, Sumitomo Life Insurance, Tokio Marine & Nichido Life Insurance, Nippon Life Insurance, Mitsui Sumitomo Kirameki Life Insurance, and Meiji Yasuda Life Insurance.
Japan Post Insurance is marketing policies to smaller businesses, which will serve as a tax-break measure, since policyholders are allowed to record premium payments as losses.