The amount paid out by life insurers across Japan to policyholders for contract cancellations in the first five months of 2026 rose about 40% from the same period a year earlier, reaching more than 6 trillion yen, the highest level since the Life Insurance Association of Japan began compiling data in 2020. Atsushi Nakamura, vice president of Meiji Yasuda Life Insurance, one of Japan's top five life insurers, said the increase was driven by higher interest rates after the Bank of Japan raised its policy rate from negative territory to 1% in just two years, prompting customers to shift to other financial products offering higher returns. At Meiji Yasuda, premium income fell 28% to 793.7 billion yen in the first quarter of the fiscal year ending June 30, but the company has yet to see any significant change in its own policy cancellation numbers.
BOJ rate hikes to 1% are driving higher yields, benefiting JGB yields.
Higher rates prompt customers to shift to other products, causing premium income to fall 28%.
