Several motor insurance providers in Japan will trim their rates by around 2-3% by January, marking the largest premium reduction in the sector in over a decade.
Improved safety features in many newer vehicles, such as automated braking which reduces crash impacts, lessen the frequency and magnitude of vehicular accidents leading to fewer claims and payouts.
Mitsui Sumitomo Insurance is expected to lower its premiums for the second consecutive year, reports
Nikkei. The insurer cut its premiums by 1% in January 2017 and is likely to further reduce them by an average of 3% early next year. Its allied firm, Aioi Nissay Dowa Insurance, is also looking for a second straight year of premium rollbacks, with a projected 3% average reduction next year.
Tokio Marine & Nichido Fire Insurance is planning to lower its premiums by 3%, in its first premium cut in 14 years. Meanwhile,
Sompo Japan Nipponkoa Insurance will cut premiums by an average of 2% next year, its sharpest decline in almost 20 years.
The four insurers have around 45 million motor insurance policies combined with an estimated 90% of policyholders expected to benefit from the lowered rates. Among driver age groups, those in their 40s are expected to enjoy the largest reductions, averaging almost 5%.
Previously, motor insurance premiums trended upwards in Japan due to more senior citizens driving and the increasing cost of automotive parts. However, the improvements of safety technology has decreased the likelihood of accidents, causing insurers to re-evaluate their prices.
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