• Kyodo

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An organization of casualty insurance companies said it will raise benchmark rates used to set member companies’ fire insurance premiums by an average of 3.5 percent to cope with increasing payouts following recent natural disasters.

The General Insurance Rating Organization of Japan said Wednesday it will be the first rise in the benchmark rates since 2005. Member insurers are expected to decide how much they will raise fire insurance premiums for housing based on the new benchmarks, with new prices likely to take effect as early as fiscal 2015.

The move is consistent with rises in other insurance premiums.

In July, earthquake insurance premiums for housing rose 15.5 percent on average. Major nonlife insurers are also planning to raise auto insurance premiums by October.

The burden to policyholders who pay about ¥50,000 a year as fire insurance premium for an independent housing would increase ¥1,000 to ¥2,000.

Member companies are not obliged to set prices based on the benchmark rates, but most companies usually revise their prices based on them.

The Financial Services Agency on Wednesday approved the industry body’s revision to the benchmark rates.