Asia Pacific Perspectives: Beyond the Bullet Train - Japan's High-Speed Insurance Transformation

With over 25 years across Asia-Pacific, Louis Lee has journeyed from actuarial roots in Sydney to leading digital transformation in global insurtech.

In this article, Louis shares insights on Japan's insurance market, exploring demographic shifts, digital innovation and opportunities for actuaries in a rapidly evolving landscape.

My journey across the Asia Pacific

It felt just like yesterday when I started my career as an intern at a large general insurer in Sydney, working as an analyst in the actuarial team.

Over the past 25 years, I've been fortunate that the profession has taken me to various Asian cities for work, experiencing the diverse cultures and people. Throughout this journey, I've been able to apply my skills and continuous curiosity across different fields of insurance, leading to my current position as a digital and technology professional in a global insurtech company.

Recently, I was given a mandate to expand the company into Japan, a market I have spent time working in across a variety of roles, giving me perspective on the industry's transformation and our profession's opportunities.

The Japanese market

Japan's insurance industry is one of the largest in the world, ranking in the top two or three^[1] in most categories, with a unique mix of insurance demand.

On the general insurance side, Japan is a country with relatively high frequency and severity of natural catastrophes, with earthquakes, volcanic activity and typhoons, which are common in the summer months. The value of the exposures is high in large parts of the country.

From a life insurance lens, Japan has the highest life-expectancy in the world, with an ageing population and low fertility rates. Combined with the decades-long low interest rates, it has led to a large life and annuity market, with a number of people purchasing whole-life and annuity policies denominated in higher-yielding currencies such as USD and AUD.

Although Japan's national health system is one of the best in the world, the ageing society has created growth opportunities for cancer insurance, and individual medical insurance for additional coverage within health insurance.

Louis Lee presenting at the 2023 International Congress of Actuaries in Sydney, Australia

Digital transformation

Japanese insurers developed their systems 50-60 years ago and were once considered one of the most modern countries in the world. Over the years, along with mergers & acquisitions, insurers had to operate and maintain a number of legacy insurance systems to run their operations. 

This has led to high costs for systems maintenance, scarcity of IT talent that can operate using the languages of legacy systems, and relatively slow business processes due to system dependencies from monolithic systems architecture. With the accelerating use of AI and new technologies, the market is ripe for Japanese insurers to modernise.

In March, I attended an insurtech conference in Tokyo, where I met with a number of insurance professionals, including several Australians, where digital transformation was a key topic.

All major insurance companies in Japan, including domestic conglomerates and multinationals (which are large entities in their own right), have either started or are designing their transformation journeys.

This journey covers anything from core system replacements through to claims process automations, digital customer journeys, modular product factories and dynamic pricing.

The multitude of the projects are immense, with transformation programs spanning from four to 10+ years. With such long duration comes very careful planning and project risk management, and many projects last longer than the tenure of the teams working on them.

Generative AI

The other big topic during the insurtech conference in Tokyo was Generative AI. Japan has been at the forefront of AI use, and CEOs and senior management in a number of insurers have started large-scale AI programs.

AI use cases discussed in the sessions focused on all areas of the insurance value-chain. Here is a selection of those I found both interesting and scalable:

• Internal GPT whereby all of the company's knowledge, including guidelines, policies and documentation, were used to train an internal GPT for all employees to access via a chat UI.
• Gen AI call centre CSR-assistant where AI transcribes the customer conversation in real-time, performing sentiment analysis and recommending a short script for the human call centre CSR to say next.
• AI OCR for medical and cancer claims: The AI first captures paper claim forms (still very common in Japan) using OCR, followed by turning the data capture into structured data, which is then entered into the claims system.
• Product GPT assist: Product provisions from all products and product generations are trained and fine-tuned into a single GPT, allowing policy servicing staff to access whenever a customer calls or visits the insurance (or bank) branch.
• Agent (advisor) training avatar that trains new agents via a roleplay-style setting, with an AI avatar acting as different personas of customers. Each session concludes with a summary of the interaction and recommendations for what the agent can improve on.

Opportunities for Australian actuaries

Japan's insurance industry creates a great deal of opportunities for the actuarial profession in the traditional areas of product development, pricing, risk management, finance and capital management. Beyond these areas, I see opportunities to work in the innovation and transformation that is defining the industry.

In digital transformation, we can contribute immensely. Although transformation programs are largely labelled as IT projects, most of the system rules are related to product, pricing, underwriting rules, claims logic and customer management. For actuaries in insurance, these are our bread and butter, and a core part of the on-the-job training for new actuaries. 

What I observed from participating in these transformation programs is that actuaries can bring business context to all of the logic and data during the project, which is particularly important in the design and testing phases of the project. Programs where actuaries and IT developers work side by side generally yield higher project success.

In Generative AI, actuaries can participate in a similar manner. We can provide business context and insights in the design and solutioning of each AI use case, using holistic thinking of the business problem the AI is being used or created to solve. Actuaries are also able to drill into the details of each step of a process and provide input on the framework of AI agents.

In summary, Japan is a dynamic market that brings unique opportunities for actuaries across all lines of business. Whilst there are a number of traditional actuarial opportunities available, there are many in new areas that Japan is accelerating in.

References

^[1] Statista. (2024, May 10). Insurance Industry in Japan. In Statista. Retrieved September 4, 2025, from https://www.statista.com/topics/6983/insurance-industry-in-japan/