Japan’s big-four insurers to raise fire insurance premiums 15%

The decision comes in the wake of failing profitability in the fire insurance market.

Japan’s four major non-life insurers plan to increase corporate fire insurance premiums up to 15% beginning October, as reported by Nippon. These hikes are expected to reach on a national average basis.

The decision to raise premiums comes in the wake of deteriorating profitability in the fire insurance sector, largely due to the increasing frequency and severity of natural disasters, which have led to a surge in insurance claims. 

This has put pressure on the insurers' financials, prompting the need for premium adjustments to ensure sustainable underwriting practices.

These premium hikes are also part of the business improvement plans submitted to the Financial Services Agency (FSA), following business improvement orders issued by the FSA last December. 

The orders were a result of findings that the insurers had engaged in rigging premiums for corporate insurance policies, necessitating regulatory intervention. 

The planned premium increases are seen as a step towards restoring appropriate underwriting standards and addressing the financial challenges posed by the rising costs of natural disaster claims.