No. of new earthquake insurance policies up 7.3%

According to the Non-Life Insurance Rating Organization of Japan (NLIRO), the number of new earthquake insurance policies in 2011 increased by 7.3% from the year before to 9,335,873 policies.

In addition, the number of contracts on residential properties in force at the end of the 2011 fiscal year had risen by 10.5% to 14,088,665. This is the highest growth rate seen since 1996 when it increased by 15.3%. In Fukushima Prefecture, the rate increased by 51.3%. Incidentally, Fukushima previously had a low proportion of property owners with earthquake insurance. Miyagi Prefecture had the second highest increase of 30.1%, and Iwate Prefecture was third with a 23.7% increase.

Last year’s earthquake served as a reminder to the importance of earthquake insurance. Every prefecture reported an increased in the number of contracts in force.

The Government is considering working with insurers to revise damage claim assessments. Currently, building damage is classified in three ways – partial, half and full loss. In addition to making these definitions more detailed,  there may also be a new standard for buildings that survived structurally but were on sinking or unstable land. If the basis for payouts becomes easier to understand, the number of new earthquake insurance policies is expected to increase further.

Sources:
The Nikkei Shimbun, June 18, 2012.
The Asahi Shimbun, June 20, 2012.

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