Four major Japanese nonlife insurers will lower auto premiums by an average of 2-3% starting next January, the biggest reduction in well over a decade. Around 90% of policyholders will benefit from the rate cuts.
Increasingly popular safety features in vehicles, such as automated braking to mitigate crash impact, are reducing accidents and therefore payouts as well, reported Nikkei Asian Review.
Mitsui Sumitomo Insurance is expected to lower premiums by an average of about 3%, a decline for the second straight year. The company reduced the premiums by an average of 1% in January. Aioi Nissay Dowa Insurance also will trim premiums for a second year in a row, with a 3% average cut for next year.
Tokio Marine & Nichido Fire Insurance plans to lower rates by 3% or so as well, in what will be the company's first premium cut in 14 years .
Sompo Japan Nipponkoa Insurance will shrink premiums by an average of 2% next year, the first cut since October 2015 and the sharpest reduction in about two decades.
By age group, those in their 40s will get the biggest reduction, up to 5%. Rates, though, could rise for seniors due to their greater risk of accidents.
Safety systems using cameras and radar to detect dangers and apply brakes automatically have decreased the number of accidents and prompted insurers to lower premiums beginning around FY2016 (fiscal year ended 31 March 2017).