The Bank of Japan has published a Review Series paper comparing changes in the composition and scale of life insurer balance sheets in Japan, Germany, the United Kingdom, and the United States. The paper focuses on how insurers have adapted to a changing environment and examines two financial stability issues in particular, the rise of asset-intensive reinsurance and growing interconnectedness between life insurers and private funds. The abstract says life insurers across markets share the core function of managing long-term assets against long-term insurance contracts, but differ widely in product offerings and asset allocation. It links recent balance sheet changes to post-global financial crisis regulatory adaptation, higher post-retirement funding needs as longevity increases, the prolonged low interest rate period that lasted until the COVID-19 pandemic, and the subsequent period of high inflation. Against that backdrop, insurers expanded product offerings and diversified investment portfolios, including into alternative investments, while the use of asset-intensive reinsurance to enhance investment yields has been increasing.
Bank of Japan2026-05-21
Bank of Japan publishes review comparing life insurer balance sheet shifts and rising asset intensive reinsurance use
The Bank of Japan published a Review Series paper comparing changes in life insurer balance sheets in Japan, Germany, the United Kingdom, and the United States, focusing on asset-intensive reinsurance and growing interconnectedness with private funds as financial stability issues. It links shifts in product offerings and asset allocation, including greater use of alternative investments and asset-intensive reinsurance, to post-global financial crisis regulatory changes, rising post-retirement funding needs, and the transition from low interest rates to high inflation.