Meiji Yasuda Life Insurance Co. said Wednesday it is considering raising the investment yield promised to policyholders amid expectations of higher interest rates and a stronger stock market.
The comment follows reports Monday that the country's biggest life insurer, Nippon Life Insurance Co., decided to raise the yield on some of its products for the first time in 21 years.
The rise means new clients will pay lower premiums.
"Due to the present investment environment, we are considering (whether) to lift the investment yield," Kenji Matsuo, president of Yasuda Life, told reporters.
Matsuo said the insurer has not yet decided on the timing of any increase, but would make a decision by the end of the month. If the yield rises, it would also be the company's first yield increase in 21 years.
Japanese insurers earned less on their investments than they promised in payouts to policyholders amid falling interest rates and stock prices after the bubble economy collapsed in the early 1990s.
Matsuo said that despite the recent tumbles in Tokyo stock prices, the market will remain firm due to good fundamentals based on the current economic recovery and solid corporate earnings.
The benchmark Nikkei average, which gained some 40 percent last year, declined sharply this week after prosecutors raided Livedoor Co. overnight Monday in connection with alleged securities law violations.