Japanese insurance firms are reassessing earthquake risks by region, which is expected to result in premiums rising by as much as 50% in some areas, according to reports.
Japan’s earthquake risks is well documented and in response to the country’s vulnerability to earthquake events, insurers in the region are expected to raise premiums in certain areas.
According to a report in the Japan Times, Tokio Marine & Nichido Fire Insurance Co., a division of Tokio Marine Holdings Inc., is to raise premiums in the Shikoku region in light of the potential for a strong earthquake to occur along the Nankai Trough off the Pacific coast, and from subsequent tsunami.
The unit will also increase premiums for Tokushima, Kochi, Ehime, Wakayama and Ibaraki prefectures by as much as 50%, dependent on building structure, with a premiums hike also expected in the Kagawa prefecture, reports the Japan Times.
However, premiums in many regions are expected to be lowered, including the Tohoku, Hokuriku, Chugoku and Kyushu regions, while premiums will remain unchanged for the Osaka Prefecture and Tokyo.
According to reports, the insurer’s average earthquake insurance premium rate across the country will stay relatively the same, in light of various increases and decreases that are expected in January, 2018.
The report also notes the steps taken by Japan’s Sompo Japan Nipponkoa Insurance Inc., which revised its earthquake premiums and area classification for premium levels in February, 2017.
The Japan Times’ explains that the company decided to segment Japan’s 47 prefectures into 948 regions based on postal codes, which then saw the firm increase premiums for coastal areas that are susceptible to tsunami risks, and lower premiums for inland regions.
