Japanese insurers adopt new earthquake pricing
Japanese insurers have proceeded to a reevaluation of their earthquake risk coverage. Insurance rates will be increased or lowered, depending on the level of exposure in the regions.
Tokio Marine & Nichido Fire Insurance has already announced its intention to increase tariffs in Shikoku, Tokushima, Kochi, Ehime, Wakayama, Ibaraki, Shizuoka and Kagawa prefectures which are highly exposed to earthquakes. The markup could be as high as 50%, depending on the structure of the building. However, premiums will be reduced in the Tohoku, Hokuriku, Chugoku and Kyushu areas and will remain unchanged in Osaka and Tokyo. Sompo Japan Nipponkoa Insurance is also one of the insurers that have adopted a new region-based tariff structure.
The method used turned out to be more accurate with the 47 prefectures of the country being subdivided into 948 sub-regions according to the postal codes. Premiums will be increased in vulnerable coastal areas and reduced in inland areas.
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