Reference net rates for auto insurance up 14.4%, travel insurance up 40.3%

2026-06-23

Property and casualty insurance premiums next year are likely to rise sharply, adding to household burdens. The Non-Life Insurance Rating Organization of Japan decided at a board meeting on the 23rd to raise the reference net rates used by non-life insurers to set premiums, lifting auto insurance rates by an average 14.4% and overseas travel accident insurance rates by 40.3%. Both are the largest increases since the organization was established in 2002.

First increase in 10 years for travel insurance, 2 years for auto insurance

The increase in the reference net rate for overseas travel accident insurance is the first in 10 years, while auto insurance rates are being raised for the first time in two years. For travel insurance, the weaker yen was a burden. Medical costs overseas, which account for most insurance payouts, have risen in yen terms, reflecting higher costs even when denominated in local currencies.

For auto insurance, the backdrop is higher repair part costs for accident-damaged vehicles and higher labor charges due to a shortage of mechanics. According to the General Insurance Association of Japan, the total amount paid by member companies in fiscal 2024 was 2.6735 trillion yen, about 20% higher than five years earlier. The auto insurance businesses of major non-life insurers have recently seen worsening profitability, and underwriting profit in the year ended March 2026 at the four major companies - Tokio Marine & Nichido Fire Insurance, Mitsui Sumitomo Insurance, Sompo Japan, and Aioi Nissay Dowa Insurance - fell 90% from the previous year to 4.2 billion yen.

Companies plan staggered premium hikes

In response to these conditions, non-life insurers are moving to raise auto insurance premiums. Tokio Marine & Nichido Fire Insurance plans an average increase of 6.5% in October 2026. Mitsui Sumitomo Aioi Insurance, which will be formed in April 2027 through the merger of Mitsui Sumitomo Insurance and Aioi Nissay Dowa Insurance under MS&AD Insurance Group Holdings, expects to raise premiums by about 6% in April 2027. Sompo Japan also plans to increase premiums by an average 1.8% in July 2026.

Member companies set premiums based on the reference net rates shown by the organization. If the increase is approved in the Financial Services Agency's review, it is expected to be reflected in each company's premiums. The revised rates will differ depending on usage, vehicle type and coverage details.

Rising premiums can also push up the consumer price index (CPI) over the medium to long term. According to an estimate by Ryohei Ikeda of Mizuho Research & Technologies, a 10% rise in auto insurance premiums would lift the CPI by 0.2 point.

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