Japanese life insurers are stepping up increases in assumed interest rates, the investment return assumptions used to price policies, as higher long-term interest rates and stronger stock markets improve investment conditions and intensify competition for customer funds. Sumitomo Life Insurance Company raised the assumed rate on single-premium whole life insurance by 0.5 percentage points in July to an industry-high 2.25%, while Meiji Yasuda Life Insurance will lift the assumed rate on level-premium savings insurance by 0.2 percentage points to 1.6% in August. Nippon Life Insurance had already raised assumed rates last year on products including level-premium whole life insurance for the first time in about 40 years. The higher assumptions effectively lower premiums; at Sumitomo Life, a 60-year-old man buying a policy with a "10 million death benefit would pay about 9% less. The push comes as household money shifts toward investment products under the New NISA (tax-advantaged investment account) program launched in 2024. Data from the Life Insurance Association of Japan showed surrender benefits, payments made when policyholders cancel contracts, totaled "6.02 trillion from January to May, up 39.1% from a year earlier and the highest since comparable data began in 2020. Insurers are also broadening product features, including higher policyholder dividends and offerings tied to U.S. dollar assets. Analysts say the range of insurance products could widen further if long-term rates keep rising. But the same rate backdrop is increasing unrealized losses on bond holdings at financial institutions. Japan's Financial Services Agency (financial regulator) said unrealized losses on yen-denominated bonds reached about "5 trillion at regional banks and about "4 trillion at shinkin banks and credit cooperatives as of the end of fiscal 2025, each roughly "1 trillion higher than a year earlier. Wakkanai Shinkin Bank disclosed valuation losses of about "63.9 billion at the end of March and received a "20 billion capital injection from Shinkin Central Bank, highlighting the pressure rising yields can place on weaker regional lenders.