According to The Toa Reinsurance, the combined underwriting profit (earned/incurred basis) of the 29 non-life members of the General Insurance Association of Japan (GIAJ) increased by JPY218 billion to reach JPY310 billion in the fiscal year that ended on March 31, 2022 (FY2021).
Toa Re highlights that ordinary profit, measured as the sum of underwriting profit and investment profit, climbed by JPY293m to JPY891bn in its study "Japan's Insurance Market 2022." Up JPY233 billion to JPY670 billion, net profits after taxes.
In FY2021, the 29 non-life insurers' total net premium income across all lines of business climbed to JPY8,806 billion ($61.1 billion), an increase of 1.3% or JPY113 billion over the previous fiscal year.
According to Toa Re, the growth was mostly fueled by the auto and fire courses.
Due to the February 2021 earthquake off the coast of Fukushima Prefecture and the rise in vehicle claims, which had decreased the year before, net claims paid (paid basis) climbed by JPY147 billion to JPY4,711 billion. The loss ratio thus rose by 1.3 percentage points to 59.3%.
Market for fire insurance
Wind and flood losses had a minimal effect on the non-life insurance market in FY2020 and FY2021, compared to the significant damage multiple large typhoons produced in FY2018 and FY2019. As claim evaluation and payment are ongoing, it is still unclear what the Fukushima Prefecture earthquake in March 2022 will actually accomplish, but it is assumed that the results will be influenced by the higher proportion of households that have purchased earthquake insurance since the Kumamoto Earthquake.
The General Insurance Rating Organization of Japan has increased the reference loss cost rate for fire insurance (homeowners' comprehensive insurance) three times since 2018 due to the fact that fire insurance business results in Japan have declined as a result of significant natural disasters in 2018 and 2019.
In response to changes in reference loss cost rates, non-life insurance companies have adjusted their premium rates. In addition, they have gradually phased in stricter terms and conditions that are not related to premium rates, such as reducing the maximum policy period for fire insurance from 10 years to 5 years, raising deductibles, and establishing liability limits.
Therefore, it is anticipated that fire insurance company outcomes will improve.
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