Bancassurance has proved to be the most successful of the new channels for sales of life insurance. Partial deregulation in 2002, allowing banks to sell annuities, a few asset-formation products, and some P&C insurance, proved that large banks have incredible selling power through their branch channels. In 2006, banks accounted for 44 percent of annuity premium income sold by private insurers. As in most other Asian countries, the trustworthy reputations of banks and their established branch coverages have made them successful in cross-selling insurance products to their customer base.
With complete bancassurance deregulation in December 2007, this channel has become even more important for life insurers, and its evolution is likely to reshape the power structure of Japan's life insurance industry. The power of the banking channel can be seen through the development of mutual-fund sales. From 1998, when mutual-fund sales through banks were deregulated, to 2005, approximately 43 percent of publicly offered, mutual-fund sales came through banks.
