Business

Japan nonlife insurers to raise premiums 6-8% in wake of disasters

Jiji

Four major Japanese nonlife insurers plan to raise their fire insurance premiums for homes by a national average of 6 to 8 percent in January 2021, sources said Wednesday.

The first simultaneous premium hikes by the four since October 2019 will follow a rise in insurance payouts on the back of a series of natural disasters across the country.

They are Tokio Marine & Nichido Fire Insurance Co., Sompo Japan Insurance Inc., Mitsui Sumitomo Insurance Co. and Aioi Nissay Dowa Insurance Co.

In Japan, fire insurance policies also cover damages from wind and flooding.

The premium hikes will be made in response to a string of natural disasters, such as torrential rains in western Japan and Typhoon Jebi, which caused heavy damage to Kansai International Airport, both in 2018.

Insurance premiums are expected to rise mainly in the disaster-hit western areas of the country. Some expect an increase of over 10 percent, depending on the location and building.

Insurance payouts from nonlife insurers in 2018 in Japan hit a record high of over ¥1.5 trillion.

The General Insurance Rating Organization of Japan, a group of nonlife insurers, raised reference insurance premium rates it calculates in October last year.

Nonlife insurers are likely to continue raising premiums, as Japan has been hit by many large-scale natural disasters over the last few years.

Insurance payouts exceeded ¥1 trillion in 2019 because a large number of houses were damaged in disasters, including by Typhoon Faxai.

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