Asian News - Earthquake insurance premiums to rise 20-30% in Japan
Source: Asia Insurance Review | Jul 2015
Japanese insurers are expected to raise earthquake premiums by 20-30% as early as the fall of 2016, according to a news report in Nikkei Asian Review.
The General Insurance Rating Organization of Japan, an entity established by the country’s non-life insurers, is expected to submit a new premium scheme as early as June to the Financial Services Agency, the Japanese financial regulatory authority.
New rates will be enforced at the time of renewal. Premiums are expected to be increased in stages so that the burden on policyholders does not increase too much at once, the report said.
There was an estimated 16.3 million earthquake policies in force as of the end of February, up 75% from a decade ago.
The announced premium increase comes as quake insurance premiums went up 15.5% on average last July, in response to increased quake risk after the 2011 disaster. The 2011 earthquake resulted in insured losses of JPY1.2 trillion (US$9.7 billion).
In a report published in March 2013, the government estimated damage would reach up to JPY220 trillion if a quake of the same magnitude were to occur along the ocean trench running off the coast of central to southwestern Japan, known as the Nankai Trough.