A property and casualty industry body is planning to raise standard earthquake insurance premiums for housing by a nationwide average of 15.5 percent following the devastating March 2011 earthquake and tsunami.
The Non-Life Insurance Rating Organization of Japan has reported the plan to the Financial Services Agency for screening and is expected to implement the earthquake insurance premium increase in July 2014. It will be the first increase since the disasters.
Premium discounts will be expanded for highly quake-resistant housing to ease the impact of the premium increase.
The industry argues the hike is needed to maintain the earthquake insurance system after reserves declined sharply due to the massive benefit payments involving the March 2011 disasters.
The hike does not reflect the latest massive damage estimate for a possible Nankai Trough earthquake off central and western Japan, the organization said. If the estimate is taken into account, premiums may be increased further.